Aristotle was more the scientist than his renowned teacher, Plato, and saw the soul as a mechanism—an animated aspect of lifeforms.
Aristotle’s theory of animation amounts to the claim that particular living things, like all particular items, can, to put it an un-Aristotelian way, be analyzed into their Form and their Matter, but that in the exceptional case of living things their Form can be identified with the traditional concept of their soul. To put this more concisely, we might use his own words, that the soul is the form of a living body. (Hugh Lawson-Tancred, De Anima (On the Soul) by Aristotle, pg. 18)
The precise term that defines this realization is entelechism, or the condition of something whose essence comes to full actualization. A vivifying “Force” that directs an organism to self-fulfillment. Hence, for Aristotle, the soul is an Actualized Principle of Animation. And this is not just confined to the human species:
Aristotle also introduced distinctions in the soul that were later adopted by the various monotheistic traditions. First, there is the vegetative soul, accounting for birth, nutrition, and growth; second there is the sentient or animal soul, possessing movement, appetites, and sensation; and third is the rational soul, possessing knowledge, deliberation, and choice. He thought that there is only one soul for a human being, which possesses a tripartite nature. “Consequently the plants possess only the vegetative soul, the animals the vegetative and the sentient, human beings the vegetative, the sentient, and the intellectual soul.” (A. H. Almaas, The Inner Journey Home Soul’s Realization of the Unity of Reality, pg. 521)
Breaking it down even further:
Aristotle characterizes psyche as the first actuality (entelecheia) of a natural body capable of sustaining life (soma phusikon metechon zoes), that is, an organism composed of organs. It expresses the living thing’s defining essence (ousia), its ‘cause’ (aition), principle (arche) and goal or end-state (telos). In the common English phrase, the psyche is ‘the life and soul’ of an organism. (Paul S. MacDonald, History of the Concept of Mind Vol One, pg. 65)
Aristotle’s crowning work, De Anima (On the Soul), utilizes philosophic categories of Form & Substance (Matter) that labels all entities as material substances that have been arranged through their Intelligible Forms. “The form is the intimate inward structure, the absolute ‘thingness’ of the thing.” Kant’s “thing-in-itself” would feel right at home here. Henceforth, all phenomena are “elements of possibilities—or the “changeableness of things.” Whereas, Form is Stable, Immovable, and permanent. Hence, soul is the “Principle of Actuality” which makes a thing “livable”. The first actuality of a material body. Therefore, Aristotle determined that the soul is fundamentally the principle that bestows life upon a body capable of existence. Soul and body are for him somehow one, the soul giving unity to the substantial gross matter, thus enabling the living being to participate in its various functions. As he puts it, “The soul is the form of the body and the body the matter of the soul (DA II I, 412aI9–20).”