"State tracking" is keeping track of information specific to your game piece that can change--(hit points, demeanor, equipment held).
The more a fiction tracks your state the more RPG it is. That is, the great discovery of RPGs was tracking every single thing about your state (and the world's). It is the main thing. Chess is most an RPG when your pawn becomes a queen--a little story moment has happened.
Games have choices or at least different possible outcomes, pure stories don't. Stories have a sequence of events designed to be interesting in themselves regardless of your investment in a given outcome, games don't.
A game is differentiated from the least-gamey interactive fiction by the possibility of undesirable choices. If all choices make the story interesting it's less of a game, it's just walking up to the shelf and deciding what to read. If I read Batman and Robin #1 and then decide whether to next read the simultaneously-released but in-continuity Robin #1 or else Batman #1, I am not playing a game--I am simply planning my evening. But it's a thin line--for example, the 1980s Clue movie had three endings. You could see any one of them in the theaters and they were all supposed to be entertaining, of course (that is, whatever you were supposed to be getting out of the movie up 'til that point--post-Wodehouse comedy, Tim Curry, each ending was supposed to present more of that--more post-Wodehouse, more Curry). There was not much of a fail state, but there was a little bit of one (one ending might be subjectively worse than another). It was about as not-gamey as a thing could be while still being almost a game.
Compare Clue the movie to skipping rocks: skipping rocks has allllllmost no story ("the rock skipped 2 times", "12 times", "zero times", the possibilities are endless but very limited) but is definitely a game. The fail state is: the rock sinks rather than skipping. It is very very game and only a wee bit story.
So Clue the movie is the extreme edge of story-with-a-wee-bit-of-game and skipping rocks is on the other edge of game-with-a-wee-bit-of-story. All of what we talk about here is in the middle.
Games are characterized by the possibility of frustration--frustration in a novel is nearly always a bad sign. In a game, it's a necessary danger that you attempt to overcome.
It's important to note that even in the most hippie style storygames you can fail and fail all the time, but the failure isn't necessarily "I died and had to stop playing that character and restart with a new status quo" it's "I got the story stick passed to me and didn't do anything interesting with it". That is the exciting possibility of failure--one akin to live performance. It is the very possibility of not doing it right and it not being fun for a moment that makes it gamey.
A game is an experience designed to subject the player to fun via the vertigo of being suspended over the abyss of nonfun. As a roller coaster makes you feel alive by reminding you of the possibility of death. Oh no, what if I die? The nonfun will consume me. I am, therefore, highly motivated to keep on. I am gripped then by a great tension.
Everyone has a threshold for this tension--everyone has a point at which the stakes are so high it's no fun anymore. Like if it's like if you lose this hopscotch match they'll drop trucks on your house and pets and loved ones then you might not have fun even at the funnest game. The point at which the stakes feel so high it goes beyond the level needed to emotionally invest the player and spills over to "no fun because it's so scary" is a subjective emotional preference and, as such, both nothing to scream about and something inevitably screamed about.
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