  The principle of equivalence provides a description of gravity in terms of
the metric tensor and determines how gravity affects the light cone structure
of the space-time. This, in turn, leads to the existence of observers (in any
space-time) who do not have access to regions of space-time bounded by
horizons. To take into account this generic possibility, it is necessary to
demand that \emph{physical theories in a given coordinate system must be
formulated entirely in terms of variables that an observer using that
coordinate system can access}. This principle is powerful enough to obtain the
following results: (a) The action principle of gravity must be of such a
structure that, in the semiclassical limit, the action of the unobserved
degrees of freedom reduces to a boundary contribution $A_{\rm boundary}$
obtained by integrating a four divergence. (b) When the boundary is a horizon,
$A_{\rm boundary}$ essentially reduces to a single, well-defined, term. (c)
This boundary term must have a quantized spectrum with uniform spacing, $\Delta
A_{boundary}=2\pi\hbar$, in the semiclassical limit. Using this principle in
conjunction with the usual action principle in gravity, we show that: (i) The
area of any one-way membrane is quantized. (ii) The information hidden by a
one-way membrane leads to an entropy which is always one-fourth of the area of
the membrane, in the leading order. (iii) In static space-times, the action for
gravity can be given a purely thermodynamic interpretation and the Einstein
equations have a formal similarity to laws of thermodynamics.
