Terminal
Physical Terminals
In UNIX, /dev/tty* is any device that acts like a "teletype", ie, terminal. (Called teletype because that's what we had for terminals in those benighted days.)
This is a typical physical terminals looks like.
Pseudo Terminals
Things get more flexible (and abstract) if we move the terminal emulation into userland. This is how xterm(1) and its clones work. To facilitate moving the terminal emulation into userland, while still keeping the TTY subsystem (session management and line discipline) intact, the pseudo terminal or pty was invented.
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