This paper is based on four assumptions: 1. Physical reality is made of linearly behaving components combined in non-linear ways. 2. Higher level behaviour emerges from this lower level structure. 3. The way the lower level elements behaves depends on the context in which they are imbedded. 4. Quantum theory applies to the lower level entities. An implication is that higher level effective laws, based in the outcomes of non-linear combinations of lower level linear interactions, will generically not be unitary; hence the applicability of quantum theory at higher levels is strictly limited. This leads to the view that both state vector preparation and the quantum measurement process are crucially based in top-down causal effects, and helps provide criteria for the Heisenberg cut that challenge some views on Schroedinger's cat.

65 pages, 10 diagrams. Revised in response to referee comments; to appear in Annals of Physics