What is meant by state-space? I understand that manipulated variables are variables that we control (i.e. flow) and disturbance variables are variables we can't control but affect the process (i.e. outside temperature), and manipulated variables are the variables we control but what is the vector of system 'states' x(t) based on?

How is C determined where do the number 1 and [1 0 1 0] come from?