Systems are composed of parts. These parts can be complex enough to be described separately as systems in their own right. The difference between a system and a component is only a matter of perspective. The following diagram illustrates that a system contains components that can contain components ad nauseum.
In order to keep track of your basic frame of reference, systems engineers have created standard containment hierarchies like the following; System, Subsystem, Module, Assembly, Component.Applying this component hierarchy to both an earth mover and a radio is not very interesting. So why not admit that systems contain systems that contain systems and the one we are talking about is the subject system and its parts are called components.
But how the components are assembled with each other is important to the system and not to the components. A carburetor used to be a complicated part of the engine in your car. But it had to connect to the throttle and the intake manifold and the air filter. The throttle designer did not care much about the carburetor except where it connected through a linkage, but the system engineer cares a great deal. In fact when the linkage is defined his work is largely done. Why? Because it is the line that connects the boxes that when defined takes the pressure off of who does what.