System Data is just what it sounds like...data used by macOS to manage the OS and it can include a lot of different things...most of which a user cannot control. Unfortunately Apple does not break things down. macOS Storage Management is also known to not show the correct information as well. The real important question is how much "Free Space" does the Finder, or Disk Utility show for the volume?
I know that iOS backups are stored in the hidden Library in the user's home folder. I'm not sure how macOS classifies iOS backups in the Storage Management.
@BDAqua's suggestion is a good one, but I've seen a few reports that these types of apps may not see everything these days.
One such example is Deleted data may still reside in hidden APFS snapshots usually associated with backup software including Time Machine. Make sure your backups have successfully transferred to external media. From what I've read, most APFS snapshots will be automatically deleted within a week, some may be deleted sooner. It is possible to see if there are any APFS snapshots, and it is possible to manually thin or delete them.
View APFS snapshots in Disk Utility on Mac - Apple Support
https://derflounder.wordpress.com/2018/04/07/reclaiming-drive-space-by-thinning-apple-file-system-snapshot-backups/
I have seen some contributors recommend making sure to have a good backup. Then erase the drive and reinstall macOS followed by restoring from backup. According to several respected contributors this last option will resolve the issue.