Observation

What is observation?

After an agent takes an action — say, calls a search tool — it can't just barrel ahead. It has to see what came back. Reading the tool's output, pulling information out of it, and updating its sense of the current state: that step is observation.

Where does it sit in the loop?

After acting, before thinking
An agent's loop is usually "think → act → observe". Observation gets the feedback, then the next round of thinking starts. Skip it and you're driving with your eyes closed.
It's the intake for information
The data a tool returns, the errors, the empty results — all of it enters the agent's awareness through observation.

What does observation actually look at?

Success or failure
Did the command run? Did the API error? That's the most basic read.
What data came back
Which results did the search return, how many rows the query found — that becomes the basis for the next decision.
How state changed
Did the file get written? Did the variable update? Observation tells the agent how far it's gotten.

Why it decides whether an agent is reliable

Bad observation poisons everything downstream: mistaking an error for success means the agent keeps building on a broken base; missing key data means bad decisions. Solid observation is the foundation of the whole act–feedback–adjust loop.

Bottom line: observation is an agent's eyes. Look at the result before the next move, and you won't walk off course.