System - Cache is a plugin to cache the contents of pages, not to be confused with the cache system that is in the configuration of Joomla.
The first (the plugin System - Cache) will cache the content of your pages, either it is your components articles or contents. If the plugin is enabled, a 'page' folder will be created in the tmp directory, and each time you visit a page on your site, content is cached. So if you go to see the same page or another user is viewing the page that was cached, you will be served by joomla content cache and not the content that is on your database. This processing is faster.
Use this plugin with caution, especially if you want to see changes immediately. If your item or your data component has changed or is changing in the database, you will not see much change. If your content rarely changes it is useful to activate the plugin. You might want or need to clear the cache manually every time you change the content of your site.
The configuraton cache is located on the configuration page, it manages the cache component, this mean it will create a cache directory for each component, and it will not put all the contents of the cached page, but just the metadata. Management is smarter and more flexible for this.