SYSTEM privilege refers to the highest level of access rights in a Windows operating system. Accounts or processes running with SYSTEM privilege can read, modify, or delete any file, change critical system settings, install or remove software, and bypass all security restrictions. This level of access is typically reserved for core system processes and is more powerful than even the Administrator account. If an attacker gains SYSTEM privilege, they have complete control over the system, making it a prime target for privilege escalation attacks. Protecting against unauthorized SYSTEM access is crucial for maintaining system security and integrity.