There is nothing circular about the definition -- merely recursive.

Recursive definitions must bottom out at some point. The ones that do not are called circular.

As soon as you observe two things to directly interact with one another, you may safely asssert that both exist under my definition.

You didn't say so before. Now, we two are interacting now (I hope), so we do exist, after all? And what about the characters in the virtual world of a computer game I mentioned before? I certainly saw them interacting.

This is, frankly, not very complicated to figure out.

So sorry for my stupidity.