One of Unix systems' essential directories is the /etc one. It contains all the basic system configuration files. Never delete it to save space! Likewise, if you want to extend your tree structure over several partitions, remember that /etc must not be put on a separate partition: it is needed for system initialization.
Here are some important files:
passwd and shadow: these two are text files which contain all system users and their encrypted passwords. shadow is only there if you use shadow passwords, which is the default installation option;
inittab: this is the configuration file for init, which plays a fundamental role when starting up the system, as we will see later on;
services: this file contains a list of existing network services;
profile: this is the shell configuration file, although certain shells use other files. For example, bash uses bashrc;
crontab: cron's configuration file, the program responsible for periodic execution of commands.
Also, certain subdirectories exist for programs which require large numbers of files for configuration. This applies to the X window system, for example, which has the whole /etc/X11 directory.