A 32-bit system refers to a computer architecture that uses 32 bits to represent data and memory addresses. This means it can process data in 32-bit chunks, allowing for a maximum of 4 gigabytes (GB) of RAM. Such systems are commonly found in older computers and some embedded devices. In a 32-bit operating system, applications are designed to run within this memory limit, which can restrict performance for modern software that requires more resources. While 32-bit systems were prevalent in the past, many users have transitioned to 64-bit systems for enhanced capabilities and improved performance.