The system unit, also known as a "tower" or "chassis," is the main part of a desktop computer. It includes the motherboard, CPU, RAM, and other components. The system unit also includes the case that houses the internal components of the computer.
The term "system unit" is often used to differentiate between the computer and peripheral devices, such as the monitor, keyboard, and mouse. For example, if a repair shop asks you to bring in your computer, it may be unclear whether you need to bring your monitor and peripheral devices as well. If you are told to just bring your system unit, it is clear you only need to bring the computer itself.
Some modern computers, such as the iMac, combine the system unit and monitor into a single device. In this case, the monitor is part of the system unit. While laptops also have built-in displays, they are not called system units, since the term only refers to desktop computers.