There are two kinds of rules in gaming. In my conversations with other gamers the term rules gets bandied about a lot. Sometimes a gamer means one thing, sometimes another, yet they use the same term to describe these different things. This leads to confusion. So I am going to discuss rules here for a bit, and through discussing I hope to bring understanding.
Rules As Laws
Most of the time when a gamer speaks of Rules, that gamer is speaking of Rules As Laws(RAL). I liken these too physical laws, like gravity, inertia, lift, and the like. RAL must be obeyed. The are reactive, in that they do nothing on there own. Once a player makes a decision hen the RAL come into play telling you what happens and what could happen. RAL are also predictive, in that they give the players a basic understanding of how the world will react to their actions. Players will be able to know their chances in any given moment of succeeding at a task, as well as understanding of teh consequences for failure. By game world I am speaking only of the world created by the RAL, not the setting or social structure of the world itself.
Rules As Procedures
The other kind of Rules that gets discussed are Rules As Procedures(RAP). These are the procedures of play, and not the specific mechanics that a gamer interacts with(RAL). The best(most obvious) example of RAP that I can think of would be the MCs moves in Apocalypse World. RAP are the procedures one uses to play the game. They are bit more nebulous than RAL, but they are incredibly important to the play of the game. this can cover anything from how a GM comes up with an adventure, to the way that characters are made, to world creation, to the proper etiquette around the table. In short RAL apply to characters, RAP apply to players.
That is all I have on this at the moment. I am sure I could go on about it, but I am afraid that my mind tends to spin in circles when it gets going and I will end up repeating myself. Its a bad habit.