words
That's the exact definition.
If you use that, then just about
every single game ever made has physics.
Ask any average gamer if say, Half-life (1) has physics and they'll say no. They don't give a stuff that if you hold 'Move forward' infront of a wall that you will collide with it. They already know you'll collide because if you didn't it wouldn't even be in stores. They want to know if props, etc behave realistically (as in HL2, Halo 3, etc)
God damn, you people are like tight-asses on weapon forums that flame anybody that uses the term 'clip' instead of 'magazine' when they do virtually the same thing in purpose. They hold ammo so you can shoot without having to pop a bullet in after each shot.
See:
In reality, when people say 'physics' they are talking about one of these two things:
The science, or the ability to realistically move stuff (objects, vehicles, dead people) around in games.