Like all animals, birds need a control centre and a set of communication channels to ensure that there system runs smoothly. As in most more complicated animals this is usually called a brain and a nervous system.
Birds have a similar basic plan to their nervous system as the rest of the vertebrates.
The brain of a bird weighs about 10 times as much as a brain of a reptile of the same weight, but slightly less than that of a mammal of the same weight. However, there is considerable variation between birds of similar size. There is therefore quite a range in the intelligence of birds, with game birds at the bottom of the list and Woodpeckers, Owls and Parrots at the top.
A bird's brain is different to a mammalian brain in that the complex folds found in the cerebral cortex of mammals are missing and the cerebral cortex itself is much smaller proportionally than in mammals. Instead the corpora striata, a more basic part of the cerebral hemispheres is proportionally larger and better developed. It is this portion of a bird's brain which is used to control instinctive behaviour - feeding, flying, reproduction etc. The mid-brain is also well developed as this is the part of the brain primarily concerned with sight, while the olfactory lobes are reduced as would be expected given that bird's in general have little use of the sense of smell.