1. A computer-implemented method for real-time bio-realistic simulation of a neural network, the method comprising: a) storing in memory definitions for a multiplicity of N distinct types of finite state machines (sector types), wherein each sector type has a number of data inputs, a number of data outputs, types of data inputs, types of data outputs, and a data compressor; b) storing in memory a multiplicity of sectors, wherein each sector is an instantiation of one of the multiplicity of sector types, wherein each sector has an internal state represented by a compressed history of data input to the sector, wherein the compressed history is factorized into distinct historical time intervals; c) defining interconnections among data inputs and data outputs of the multiplicity of sectors to form a network of sectors; and d) emulating in parallel the network of sectors using parallel computers, wherein the emulating comprises, for each sector, i) processing data input to the sector to produce data output from the sector, wherein the processing comprises computing the compressed history of data input to the sector, storing the compressed history of data input to the sector in memory; and ii) communicating the data output to other sectors in accordance with the defined interconnections.