My system data is taking up too much space

• Restart the device. That's it.

If the above does not resolve the issue then...

I would ignore that because this system data will make room when you need more space on your iPhone. These are some cache and temporary files that will be erased by the system whenever you try to save more files.

You may --> Clear Other storage on your iPhone or iPad - Apple Support (IN)

Tap on System Data it will take you to "Other System Data"

Now the question is what is the "Other System Data" storage. Read on...

• Other System Data: Non-removable mobile assets, like Siri voices, fonts, dictionaries, non-removable logs and caches, Spotlight index, and system data, such as Keychain and CloudKit Database. Cached files can't be deleted by the system.
• System: Space taken by the operating system. This can vary based on your device and model.

About cached files in "Other System Data"

Finder and iTunes categorize cached music, videos, and photos as Other instead of actual songs, videos, or photos. Cached files are created when you stream or view content like music, videos, and photos. When you stream music or video, that content is stored as cached files on your device so you can quickly access it again.

Your device automatically removes cached files and temporary files when your device needs more space.

If storage on your device differs from what you see in Finder or iTunes

Since Finder and iTunes categorize cached files as Other, reported usage for Music or Videos might differ. To view usage on your device, go to Settings > General > [Device] Storage.

If you want to delete the cached files from your device

Your device automatically deletes cached files and temporary files when it needs more space. You don't need to delete them yourself.