@CognitiveNetwork The input to the system is X. The gain K is a parameter of the controller that we set to get the desired system behavior. The gain affects what the system will do to X to get the output Y.
@CognitiveNetwork The subtractor computes the error between the output Y and the desired value X (the input to the system is the desired value). The error is used by the controller (the GC(s) box) to adjust the input to the plant (the P(s) box) to make the output what we want it to be.