Simics is a full-system simulator. Its purpose is to replace real hardware in testing, development, research, etc. In order to be useful, Simics must be able to run realistic workloads. This requires a careful balancing of accuracy and efficiency.
Technically, Simics can be classified as an event-driven simulator. It models the world as a series of disjoint events, where each event occurs at some specific time. Events can query and modify the simulated state, and post new events. This approach is very efficient, since the simulator does nothing at all when there are no events, and can be made arbitrarily accurate. The alternative, clock-driven simulation, can never be made as fast.
Simics simulates a CPU at the instruction set level, the lowest level that is readily visible to software. This lets it run unmodified binary code for the complete software stack of a system. To make this work, the simulator provides bit-exact functional accuracy at this level. Somewhat less accuracy is normally provided in the time domain. However, time accuracy can be selectively improved if needed, at the cost of sacrificing some efficiency.