Summary: Animation is simulation of motion using mechanical or electrical means, to add details and interest to your model railroad.
See the Video.
Animation is the process of giving your model railroad artificial life through movement or sounds beyond the train itself. Examples include moving people, lights that go on/off, background sounds, moving equipment or vehicles, etc. Animation can be very simple or quite elaborate involving a series of related movements. For example, there are indoor layouts where a simulated fire gets triggered in a house and minutes later a firetruck arrives and the fire then dissipates.
Animation has existed on model railroads for many years, but it is a little easier with DCC. There are components that allow for detection of events such as a passing train. These same components can then send electrical signals which can be used directly by your animation device to trigger some movement, sound or light effect. With DCC it is also easier to trigger multiple effects using the same trigger event.
Examples would include crossing gates at a grade crossing, moving semaphores on signal towers and other small details triggered by the passage of a train. Other applications would include the use of a braking district to automatically stop a train when a signal is red, such as when a bridge is raised, a turnout is not aligned correctly or another train triggered the event.
Other aminations would include background details, such as vehicles moving on a road, traffic lights and animated signage.
It is possible to add too much animation to the point where it distracts from the trains. The layout will take on a toy like atmosphere as a result, invoking images of Lionel trains and their animated accessories.
Many possibilities are offered by the use of microcontrollers such as the Arduino to control motors and lighting to create a visual effect.