The digital twin is the representative of a real object or subject in the digital world. The digital twin of a building can be a 3D CAD model; however, it could also be a "5D model", that is: the 3D CAD design plus time dimension with total life cycle plus cost dimension. The digital twin of a car "knows" the operating status (via sensors) or the location of that car (via GPS sensors). A machine in the production hall can have its digital twin.
What makes the concept of the digital twin so relevant in the digital economy or in the world of the "Internet of Things"? - The digital twins form a META layer to the real world, and these digital representatives can exchange information and data, which is the basis for the efficient coordination of processes in the real world. Example: A sensor in an electric car indicates the defect of a component; the digital twin of the vehicle (which is likely to be in the cloud) communicates with the nearest auto repair shop (more precisely: the digital twin of this shop), checks the availability of spare part and availability of a mechatronics engineer. The two digital twins arrange a workshop appointment.