A new conceptual foundation for the notion of "information" is proposed, based on the concept of a "distinction graph": a graph in which two nodes are connected iff they cannot be distinguished by a particular observer. The "graphtropy" of a distinction graph is defined as the average connection probability of two nodes; in the case where the distinction graph is a composed of disconnected components that are fully connected subgraphs, this is equivalent to Ellerman's logical entropy, which has straightforward relationships to Shannon entropy. Probabilistic distinction graphs and probabilistic graphtropy are also considered, as well as connections between graphtropy and thermodynamic and quantum entropy. The semantics of the Second Law of Thermodynamics and the Maximum Entropy Production Principle are unfolded in a novel way, via analysis of the cognitive processes underlying the making of distinction graphs This evokes an interpretation in which complex intelligence is seen to correspond to states of consciousness with intermediate graphtropy, which are associated with memory imperfections that violate the assumptions leading to derivation of the Second Law. In the case where nodes of a distinction graph are labeled by computable entities, graphtropy is shown to be monotonically related to the average algorithmic information of the nodes (relative to to the algorithmic information of the observer). A quantum-mechanical version of distinction graphs is considered, in which distinctions can exist in a superposed state; this yields to graphtropy as a measure of the impurity of a mixed state, and to a concept of "quangraphtropy." Finally, a novel computational model called Dynamic Distinction Graphs (DDGs) is formulated, via enhancing distinction graphs with additional links expressing causal implications, enabling a distinction-based model of "observers."