The system unit, also known as a "tower" or "chassis," contains the main components of a desktop computer. It includes the motherboard, CPU, RAM, and other components. The case that houses these components is also part of the system unit.
Peripheral devices, such as the monitor, keyboard, and mouse are separate from the system unit. Peripherals, combined with the system unit, create a "workstation."
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 considered system units, since the term only refers to desktop computers.