The 'SYSTEM' user account is a predefined user account on Windows NT systems intended for the Service Control Manager(SCM). This user account, along with other user accounts such as 'DEFAULT' (or 'Default User') are installed on first boot. This user cannot be accessed from the logon screen. This user account is the main handler for most of the user privilege and system security handling of programs and files within the Windows operating system. If Windows and the computer itself were its own entity, then the 'SYSTEM' account is where it would be logged on. The difference is, that user is running in the background while you are logged in as yourself.
Microsoft explains this account via the Microsoft Learn website:
Default local system accounts: SYSTEM
The SYSTEM account is used by the operating system and by services running under Windows. There are many services and processes in the Windows operating system that need the capability to sign in internally, such as during a Windows installation. The SYSTEM account was designed for that purpose, and Windows manages the SYSTEM account's user rights. It's an internal account that doesn't show up in User Manager, and it can't be added to any groups.
On the other hand, the SYSTEM account does appear on an NTFS file system volume in File Manager in the Permissions portion of the Security menu. By default, the SYSTEM account is granted Full Control permissions to all files on an NTFS volume. Here the SYSTEM account has the same functional rights and permissions as the Administrator account.
The 'SYSTEM' user account is a predefined user account intended for the Service Control Manager(SCM). This user account, along with other user accounts such as 'DEFAULT' (or 'Default User')
The 'SYSTEM' user account is a predefined user account intended for the Service Control Manager(SCM). This user account, along with other user accounts such as 'DEFAULT' (or 'Default User')
From: Microsoft Article on Local Accounts - learn.microsoft.com