The extent to which people believe they have power over events in their lives. A person with an internal locus of control believes that he or she can influence events and their outcomes, while someone with an external locus of control blames outside forces for everything.
This concept was brought to light in the 1950’s by Julian Rotter. The underlying question regarding the locus of control is this…do I control my life or does something else (like a God) control it? This simple idea has profound significance as it influences peoples’ beliefs very strongly. Do you believe in God? Are you an agnostic? Why? Do I just have good luck? If I make all the right decisions does that mean I can make my life be exactly how I envision it? These are all questions that might arise from that simple premise.
I think this page has some excellent insights about the locus of control and how it relates to psychological well being: http://wilderdom.com/psychology/loc/LocusOfControlWhatIs.html