In this paper, the authors discusses the design of cyber-physical systems software around Intelligent Physical Worlds (IPW). An IPW is the embodiment of control software functions wrapped around the external world processes. The IPW performs core domain-specific activities while adapting its behavior to the changing environment conditions and user inputs. The IPW exhibits an intelligent behavior over a limited operating region of the system - in contrast with the traditional models where the physical world is basically dumb. To work over a wider range of operating conditions, the IPW interacts with an Intelligent Computational World (ICW) to patch itself with suitable control parameters and rules/procedures relevant in those changed conditions.