A system is a set of parts that interrelate to form a complex whole. There are many ways to frame a game as a system: a mathematical system, a social system, a representational system, etc.
There are four elements that all systems share:
Objects are the parts, elements, or variables within the system.
Attributes are the qualities or properties of the system and its objects.
Internal relationships are the relations among the objects.
Environment is the context that surrounds the system.
The way these elements are identified in any individual game depends on the way it is framed as a system. The four elements would be different, for example, if a game were framed as a formal, mathematical system, an experiential system of play, or as a cultural system.
These three framings of a game as a system, formal, experiential, and cultural, are embedded in each other. A game as a formal system is always embedded within an experiential system, and a game as a cultural system contains formal and experiential systems.
Although all three levels (formal, experiential, and cultural) exist simultaneously, it can be useful to focus on just one of them when making an analysis or solving a design problem. It is crucial when designing a game to understand how these three levels interact and interrelate to each other.
Systems can be open or closed. An open system has an exchange of some kind with its environment. A closed system is isolated from its environment. Whether or not you consider a game as a closed or open system depends on the way you frame it:
Formal systems are closed systems.
Experiential systems can be open or closed systems.
Cultural systems are open systems.