Work done by the system refers to the energy transferred by a thermodynamic system as it exerts a force on its surroundings during a process. This concept plays a critical role in understanding how energy is exchanged between systems and their environment, impacting processes like expansion or compression, and influences overall energy analysis. It is essential to grasp this concept as it connects to various thermodynamic processes, efficiency in energy conversion, the nature of reversible and irreversible processes, and energy changes in reacting systems.