System files are used internally by an operating system to function correctly. If a system file is removed or becomes corrupt, it is likely that the operating system will not function as expected.
Files that are used only by the operating system are often hidden by default to prevent accidental changes, however it is often possible to change this setting.
System files can include device drivers, indexes, libraries, cursors, icons and help files. Generally, system files are not compatible with other operating systems although there are exceptions (a printer driver for example may work with Windows, Mac OS X and Linux systems).