In the reclass() function you have defined a single variable "industrial_area", whereas you have called three variables in the code "industrial_area", "one_third_neigh_area", "two_third_neigh_area".
You should add three variables in the function, and also define the appropriate fields in the expression.
Moreover, I don't understand "unclassified"? If this is a value, it won't fit in a Short integer type. You could replace it with values like 0 or 99.
e.g.: Assuming the layer has three numeric fields viz., "industrial_area", "one_third_neigh_area", "two_third_neigh_area"
Expression:
reclass(!industrial_area!, !one_third_neigh_area!, !two_third_neigh_area!)
Code Block:
def reclass(industrial_area, one_third_neigh_area, two_third_neigh_area):
if (industrial_area > two_third_neigh_area):
return 13
elif ((industrial_area > one_third_neigh_area) and (industrial_area< two_third_neigh_area)):
return 16
elif (industrial_area < one_third_neigh_area):
return 99
Think Location