Okay, I think you have a conceptual difficulty here.
A system is a probability resolution engine that facilitates telling the interactive story (i.e. the game), to put it simply. This is commonly done with dice that generate random numbers, and the system used both instructs the players and game master (also called the referee, dungeon master or game keeper).
What this system relies on is probability, specifically expected event, to mathematically establish a "normal" and then contains rules for resolving what happens when the actual results of the dice rolls (or whatever is used, some games don't use dice) differ from the "typical" result. So one number may signify failure, another success, etc. Many systems will take pains to quantify and describe the effects of actions taken in this way.
Typically what races exist is a matter of setting information (a realistic game about the military for example will have only humans, but a game set in Planescape may have dozens), but the system may contain rules for how those races perform or act.
For example if one race is particularly intelligent, they may be more likely to succeed on tasks that require reason or knowledge.
Your other examples of:
quote:
-Items available
-Quests
-Scenarios
-Dungeons
Are similar, what exists in the world is decided mostly by the person who creates the game who is generally going to base it on the game's setting. The game system by contrast is what the game uses to distinguish or determine what effects the players have in the scenario, etc. I.e. do they succeed or fail at a given task.
I hope that helps somewhat? It's really probably best just to get a copy of a popular system that seems appealing to you and just play one as a player for a while, it will help internalize the concept.