A Smart house is a house with building automation. They usually have centralized control lighting, HVAC (heating, ventilation and air conditioning), appliances, security locks of gates and doors and other systems to provide improves convenience, comfort, energy efficiency and security.
The way it works is that the desired devices or home appliance which have sensors or motion detectors are connected to a computer network to be controlled by a personal computer, remote control device, ipads or phone gadgets. It may also allow control from the internet. You can literally connect to the internet and check if everything is in order in your house, lock the doors or perhaps you forgot to feed the pet.
Usually sensors are integrated to the devices or appliances, for example a fridge has a sensor that detects when the last bottle of milk is taken from the refrigerator using an RFID (Radio Frequency Identity) tag and sends a message to the milk store to refill. Common examples are sound detectors that can recognize a clap and respond by turning on the light.
Imagine walking into your home, at the sensing of your presence plays your favorite music, warms your pizza , turns on the light and even adjusts the temperature (HVAC) to suit you without a touch of a button.
Motion detectors can turn off the lights when it senses that no one is in the building thus saving energy. In a situation were no one is at home and the alarm is set, the house can send signals to the controller when someone enters or call an emergency number.