SHRDLU
Terry Winograd's program held an English dialogue about a world of blocks: it carried out commands, answered questions and explained its own actions.
Why it matters
The most convincing demonstration of language understanding in twenty years, and the clearest evidence that it rested on a tiny closed world.
SHRDLU combined syntactic parsing, semantics and a procedural representation of knowledge: the meaning of a sentence became a program that could be run. The system tracked context, resolved pronouns and answered why it had done something. The world held a few blocks, pyramids and a box. Winograd himself became one of the sharpest critics of the approach: nobody managed to scale the micro-world up to a real one.