Rather than paraphrasing or summarizing (and thereby probably distorting) Smolin's thinking, please allow me to quote from Chapter 3 of 'Three Roads to Quantum Gravity.'
". . . to formulate a theory of cosmology we must acknowledge that different observers see partly different, partial views of the universe. From this starting point it makes no sense to try to treat the whole universe as [if it] were a quantum system in a laboratory of the kind that ordinary quantum theory applies to. Could there be a different kind of quantum theory, one in which the quantum states refer explicitly to the domain seen by some observer? Such a theory would be different from conventional quantum theory. It would in a sense 'relativize' that theory, in the sense that it would make the quantum theory depend more explicitly on the location of the observer inside the universe. It would describe a large, perhaps infinite set of quantum worlds, each of which corresponds to the part of the world that could be seen by a particular observer, at a particular place and time in the history of the universe."
"In the past few years there have been several proposals for just such a new kind of quantum cosmology. One of them grew out of the consistent-histories approach. It is a kind of reformulation of it, by Chris Isham and his collaborator Jeremy Butterfield, in which they make context dependence the central feature of the mathematical formulation of the theory. They found that they can do this using topos theory, which allows one to describe many interrelated quantum mechanical descriptions, differing according to the choice of context, in one mathematical formalism. . . ."
". . . Before Isham and his collaborators, Louis Crane, Carlo Roelli and I developed different versions of an idea we called relational quantum theory. . . . The basic idea was that all [observers] have a context, which consists of the part of the world they describe. Rather than asking which quantum description is right . . . we argue that one has to accept them all. There are many quantum theories, corresponding to the many different possible observers. They are all interrelated, because when two observers are able to ask the same question they must get the same answer. The mathematics of topos theory, as developed by Chris Isham and collaborators, has told us how to do this for any possible case in which it may arise."
[. . . .]
". . . Many of us believe that this is a definite step in the right direction. Rather than trying ot make sense of metaphysical statements about their being many universes--many realities--within one solution to the theory of quantum cosmology, we are constructing a pluralistic version of quantum cosmology in which there is one universe. That universe has, however, many different mathematical descriptions, each corresponding to what a different observer can see when they look around them. Each is incomplete, because no observer can see the whole universe. Each observer, for example, excludes themselves from the world they describe. But when two observers ask the same question, they must agree. And if I look around tomorrow it cannot happen that the past changed." (pp. 46-48, TRTQG)
Apologies for the extended quotes, but I would rather Smolin speak for himself about these ideas. And, in a spirit of full disclosure, I must admit to having some personal partiality to Smolin's proposed approach, because these ideas dovetail rather well with my own thinking about the universe, a small portion of which thinking is spelled out in one the other essays in this year's FQXi competition as well as in reference 4 to that essay.
I certainly would be interested to learn what new developments may have transpired along these lines of thinking since 'Three Roads' was published in 2001. And of course I am curious about how these ideas might relate to the thinking proposed in your own current essay.
I hope this is helpful.