In thermodynamics, a system refers to the volumetric region under study. The system is characterized by a boundary, across which both matter and energy may pass. A system, in more detail, is the portion of the universe under study, being separated from the remainder of the universe by a boundary, which may be material or not, but which, by convention, delimits a finite volume, across which the possible exchanges of work, heat, or matter may pass. [1]

History
The term system or "thermodynamic system" are both modern-day synonyms of "working substance", used by French physicist Sadi Carnot in 1923, and "working body", used by German physicist Rudolf Clausius in 1850.

Human system
To properly understand the concept of system, for use in the extrapolation of thermodynamic analysis in human systems, e.g. a town, community, or social group, etc., being comprised of reactionary human molecules (people), one must aver to the more detailed original terminology used by Clausius. [2]

References
1. Perrot, Pierre. (1998). A to Z of Thermodynamics, Oxford: Oxford University Press.
2. Thims, Libb. (2007). Human Chemistry (Volume One), (preview). Morrisville, NC: LuLu.