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I had to look it up. From wikipedia:

A proportional-integral-derivative controller (PID controller) is a control loop feedback mechanism (controller) widely used in industrial control systems [...] A PID controller calculates an "error" value as the difference between a measured process variable and a desired setpoint. The controller attempts to minimize the error in outputs by adjusting the process control inputs.

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These are the bread-and-butter of a huge amount of industrial process controls. Tuning them can be a bitch though.

And unforunately, with the proliferation of cheap prototyping platforms and sensors, there are an abundance of projects and kickstarters out there aiming to be home automation / garden automation / mushroom farm systems / etc that try to implement process control without even knowing the existence of PID algorithms and they just do dumb behavior: temperature too low -> turn on heater. temperature too high -> turn off heater, etc.

The algorithm you described is known as "bang-bang"[0]. For some systems it is an adequate control strategy.

[0]: http://en.wikipedia.org/wiki/Bang%E2%80%93bang_control

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