A network of sensor and controller nodes having the ability to be dynamically programmed and receive updated software from one another, and from a host system. Each network node includes multiple state machines, at least some of which are operable relative to physical pins at the network node; the physical pins correspond to inputs from sensor functions or outputs to control functions. The network nodes include microcontrollers that are operable in an operating mode to execute a state machine and respond to commands from other nodes or the host, and in a read mode to receive and store program instructions transmitted from other nodes or the host. A learn mode is also provided, by way of which a network node can store program code corresponding to instructions and actions at the node when under user control.