Aristotle's ideas were derived from Plato's view of the world and it's relation to absolute Forms. In contrast to Plato's beliefs, Aristotle felt that the basis of true reality can be determined by what exists in the physical world, not by an incomprehensive world of Ideas.
To explain his theory, Aristotle constructed different categories to explain existence. He taught that each object in the physical world consists of a substance, which is it's main reality and without substance an object can not exist. Furthermore, quality is solely an ingredient of each individual substance. In other words, substances are distinct and are composed of different common qualities. However, form is what determines the substance's essence. .
Derived from these terms, Aristotle also introduced his theory of cause and effect, which if relevant to his theory of potentiality and actuality. He taught that an organism changes form until it reaches a state of actuality. The form is known from the beginning and this beginning state has potentiality. In addition, form strives to become it's own reality or actualize it's potentiality and the only way this can be done is by motion through the forms. The cause for things can only be described when actuality is reached. .
The ideas of actuality and potentiality bring to the light the notion of the Unmoved Mover, or God. This was a supreme form, which possessed actuality and hence, was without motion. Furthermore, the Unmoved Mover is immaterial because matter is in a state of potentiality and the Unmoved Mover only contains actuality. The Unmoved Mover is important to Aristotle's theories because it is a logical explanation for the cause of the universe; it is the universal form.