One character responds to the stimuli of another character. Character A says something mean to character B and character B responds that he feels hurt.

Well, I wouldn't classify a ripping paper as a response except in the most broad, information-theoretic context. The hallmark of an intelligent system is that it can use stored or external energy in a generalized way in order to stabilize a local high-energy (non-ground) state.

It is able to physically compute the internal state changes which best achieve stability: I can jump to reach an apple. A paper is just responding to forces and cannot "jump" (or run a process that spontaneously and permanently introduces stable higher energy internal states based on input)

I have a semi-developed philosophical framework I refer to as Zodeaism, which translates to "Living Ideas", which attempts to describe the difference between intelligent computation and regular flow. It directly confronts notions such as life, consciousness and intelligence under a single theoretical framework. It views biology as the hardware which runs more general processes, and posits that these processes themselves can sometimes be ascribed identities and viewed as reactive organisms. I've posted about it here before:

https://news.ycombinator.com/item?id=22848549

https://news.ycombinator.com/item?id=21413024

Some excerpts:

  I am exploring the physical implications of a philosophical concept I have been working on for a while which I refer to as Zodeasim, specifically I am trying to couple consciousness with the concept of system which is able to expend energy in order to exert a mind-to-world fit in the interest of the system's continued growth and stability. This is similar and complimentary to Friston's free energy principle.

  The ability to perceive emotions is a powerful apparatus which greatly extends the capability of a system to perceive itself as a single entity which has certain needs which need to be met, so even if a bug also constantly consumes and expends energy in order to remain in a higher energy state, our perception of the world and of ourselves is radically different. This makes it difficult for us to agree upon what a "conscious experience" is, and if all forms of life are even "conscious". The Panpsychists believe that even a rock contains "consciousness", however my assertion is that only periodic systems with the ability to consume and expend energy in a directed fashion have any sort of "experience".

  In my theory, the real "life forms" are ideas which possess the capabilities of information storage, adaptation, self-repair, and transmission. My own consciousness is mediated by thousands of such ideas, some competing and some working in harmony.

  I consider such an act of "living" motion which can take another path than that of least resistance to be a "kin". In other words, any motion which is the result of a physical calculation (Zodeaism is compatible with determinism) and leads to an increase in external energy state. A kin is any such motion, large or small.

  As an independent organism, my system is a culmination of a great deal many different kinds of kins, which can usually be broken down into simple rules, such as the activation potential of a neuron in my brain being a straight-forward non-linear response to the amount of voltage it is receiving from other neurons, as well as non-kins, such as a protein "walking" across a cell, a.k.a continuously "falling" into the lowest energy state. Thus I do not gain any conscious perception from such proteins, but I do gain it from the total network effect of all my brain's neuronal structures making simple calculations based on sensory input.

  So now the problem becomes, what is the smallest kin we've observed in nature? Single-celled bacteria can expend energy in order to move through their environment against forces like friction and gravity, but a virus "rides the waves" if you will, never expending energy for things like respiration or locomotion. Any energy which is spent internally is potential energy like chemical or gravitational, released through a physical process without need for computation. I am unaware of anything smaller than a single-celled organism which produces such kins, but that doesn't mean they aren't out there. Even ethereal life forms such as ideas can produce these kins within the bodies of countless individuals across the planet, so physically local computational circuitry isn't a hard requirement.

  So, according to this framework viruses aren't alive, however we can make the case that some machines are, except the experience is incomparable because of the advanced circuitry we contain which mediates our experience through things like emotion.