System design is the process of defining the architecture, components, and data flow of a system to meet specific requirements like scalability, reliability, and performance. It sits at the intersection of software engineering and infrastructure planning, requiring trade-offs between consistency, availability, and partition tolerance (CAP theorem). Understanding system design fundamentals is essential for building distributed systems that can handle millions of users while maintaining acceptable performance, cost efficiency, and operational simplicity. The key insight: premature optimization is expensive, but ignoring scalability patterns until crisis time is catastrophic—the goal is to design systems that start simple but have clear paths for growth when traffic demands it.