Defining a theory in a narrow context is a way that permits it to be lifted to a richer outer context and applied. [McC93] discusses lifting a simple theory of above(x,y) as the transitive closure of on(x,y) to an outer situation calculus context that uses on(x,y,s) and above(x,y,s). A key formula of that paper is
which relates the three argument situation calculus predicate on(x,y,s) and the two element predicate on(x,y) of the specialized theory of on and above. The use of contexts to implement ``microtheories'' in Cyc is described in [Guh91]. This allowed people entering knowledge about some phenomenon, e.g. automobiles, to do it in a limited context, but leave open the ability to use the knowledge in a larger context.
Defining a narrow context for a problem and importing facts that permit the problem to be solved by considering only a small set of possibilities. For example, when formulating the missionaries and cannibals problem a person or program must take a number of common sense facts into account, but ends up with a thirty two state space. All that is relevant in this context is the numbers of missionaries, cannibals and boats on each bank of the river.