I think the confusion might come from your use of "steps" instead of "states". You can think of a machine's state as the value it has in its memory (although as a previous poster noted, some people also take a machine's state to include the contents of the tape -- however, I don't think that definition is relevant to your question). It's possible that this change in terminology might be at the heart of your confusion. Let me explain what I think it is you're thinking. :)
You gave lists of five numbers -- for example, (1,0,1,1,2). As you correctly state, this should be interpreted (reading from left to right) as "If the machine is in state 1 AND the current square contains a 0, print a 1, move right, and change to state 2." However, your use of the word "step" seems to suggest that that "step 2" must be followed by "step 3", etc., when in reality a Turing machine can go back and forth between states (and of course, there can only be finitely many possible states).
So to answer your questions:
- Turing machines keep track of "states" not "steps";
- What you've described is a legitimate Turing machine;
- A simpler (albeit otherwise uninteresting) Turing machine would be one that starts in the HALT state.
Edits: Grammar, Formatting, and removed a needless description of Turing machines.
Response to comment:
Correct me if I'm misinterpreting your comment, but I did not mean to suggest a Turing machine could be in more than one state at a time, only that the number of possible states can be any finite number. For example, for a 3-state machine, you might label the possible states A, B, and C. (In the example you provided, you labeled the two possible states as '1' and '2') At any given time, exactly one of those values (states) would be in the machine's memory. We would say, "the machine is in state A" or "the machine is in state B", etc. (Your machine starts in state '1' and terminates after it enters state '2').
Also, it's no longer clear to me what you mean by a "simpler/est" machine. The smallest known Universal Turing machine (i.e., a Turing machine that can simulate another Turing machine, given an appropriate tape) requires 2 states and 5 symbols (see the relevant Wikipedia article).
On the other hand, if you're looking for something simpler than a Turing machine with the same computation power, Post-Turing machines might be of interest.