It is notoriously difficult to find a satisfactory definition of life. No matter what definition you come up with you can always find a counter-example. I've come to believe that the reason is that you can't separate a life form from its environment. To go even a little further, I don't think life can be separated from the underlying dynamical laws from which it arises. Thus, the fact that macroscopic life forms on earth tend to be discrete and identifiable is incidental. We can come up with ad hoc rules to define them but there will always be exceptions. One could imagine an ocean of self-catalyzing molecules (i.e. RNA world) that reproduce, exchange information and behave as a giant life form. Morris Hirsch and Freeman Dyson both have suggested that you could have electromagnetic life forms living in a plasma cloud of charged particles.
So my definition (which I'm sure is still flawed), is that life is a universe comprising of a set of dynamical laws acting on a set of constituent particles in which entropy can decrease in a localized region that is much larger than the scale of the particles and for timescales longer than the average interaction time of these particles. Implicit in this definition is that the localized region is in a state of quasi-equilibrium so that entropy can be defined. Thus a set of non-interacting particles would not be alive because entropy lowering fluctuations only last as long as the particle interaction time (or particle transit time in this case).
I have no idea what would be a minimal set of laws or rules that could support life. Maybe life-possible rules fall into Steve Wolfram's select class of cellular automata (CA) that exhibit nontrivial complexity. Wolfram's argument is that you cannot predict a priori what a set of CA rules will do. There is no short cut to deducing what patterns can arise without actually iterating the rules. Thus, life itself is the ultimate grand experiment. I've always found great solace in Andrei Linde's multiverse idea. Universes with different physical laws pop in and out of existence, and no one can predict if life is possible in a given universe before it exists.