A system is enclosed by walls that bound it and connect it to its surroundings. Often a wall restricts passage across it by some form of matter or energy, making the connection indirect. Sometimes a wall is no more than an imaginary two-dimensional closed surface through which the connection to the surroundings is direct.
A wall can be fixed (e.g. a constant volume reactor) or moveable (e.g. a piston).  For example, in a reciprocating engine, a fixed wall means the piston is locked at its position; then, a constant volume process may occur. In that same engine, a piston may be unlocked and allowed to move in and out. Ideally, a wall may be declared adiabatic, diathermal, impermeable, permeable, or semi-permeable. Actual physical materials that provide walls with such idealized properties are not always readily available.
The system is delimited by walls or boundaries, either actual or notional, across which conserved (such as matter and energy) or unconserved (such as entropy) quantities can pass into and out of the system. The space outside the thermodynamic system is known as the surroundings, a reservoir, or the environment. The properties of the walls determine what transfers can occur. A wall that allows transfer of a quantity is said to be permeable to it, and a thermodynamic system is classified by the permeabilities of its several walls. A transfer between system and surroundings can arise by contact, such as conduction of heat, or by long-range forces such as an electric field in the surroundings.
A system with walls that prevent all transfers is said to be isolated. This is an idealized conception, because in practice some transfer is always possible, for example by gravitational forces. It is an axiom of thermodynamics that an isolated system eventually reaches internal thermodynamic equilibrium, when its state no longer changes with time.
The walls of a closed system allow transfer of energy as heat and as work, but not of matter, between it and its surroundings. The walls of an open system allow transfer both of matter and of energy. This scheme of definition of terms is not uniformly used, though it is convenient for some purposes. In particular, some writers use closed system where isolated system is here used.
Anything that passes across the boundary and effects a change in the contents of the system must be accounted for in an appropriate balance equation. The volume can be the region surrounding a single atom resonating energy, such as Max Planck defined in 1900; it can be a body of steam or air in a steam engine, such as Sadi Carnot defined in 1824. It could also be just one nuclide (i.e. a system of quarks) as hypothesized in quantum thermodynamics.