Within Emacs, the terminal's cursor shows the location at which editing commands will take effect. This location is called point. Many Emacs commands move point through the text, so that you can edit at different places in it. You can also place point by clicking mouse button 1.
While the cursor appears to point at a character, you should think of point as between two characters; it points before the character that appears under the cursor. For example, if your text looks like `frob' with the cursor over the `b', then point is between the `o' and the `b'. If you insert the character `!' at that position, the result is `fro!b', with point between the `!' and the `b'. Thus, the cursor remains over the `b', as before.
Sometimes people speak of "the cursor" when they mean "point," or speak of commands that move point as "cursor motion" commands.
Terminals have only one cursor, and when output is in progress it must appear where the typing is being done. This does not mean that point is moving. It is only that Emacs has no way to show you the location of point except when the terminal is idle.
If you are editing several files in Emacs, each in its own buffer, each buffer has its own point location. A buffer that is not currently displayed remembers where point is in case you display it again later.
When there are multiple windows in a frame, each window has its own point location. The cursor shows the location of point in the selected window. This also is how you can tell which window is selected. If the same buffer appears in more than one window, each window has its own position for point in that buffer.
When there are multiple frames, each frame can display one cursor. The cursor in the selected frame is solid; the cursor in other frames is a hollow box, and appears in the window that would be selected if you give the input focus to that frame.
The term `point' comes from the character `.', which was the command in TECO (the language in which the original Emacs was written) for accessing the value now called `point'.
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