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A system file is a crucial part of the system, hence the name.
System files are usually essential to an operating system or driver which is why they are protected from accidental deletion or even intentional deletion through the use of permissions.
This is usually done by flagging a file with a system attribute. Specific examples of system files may have the .sys extension, especially in Windows.
These files are also usually located in specific folders that identify it to be a system folder. For Windows, these include the System32 folder, the System Suitcase and files on the sys location on the Mac OS, and the root folder of the Linux file system called sysfs.