The top of the hierarchy is the System. That's the largest classification there is. A System will probably cover an entire public service. In my 996T, Memphis/Shelby County Public Service is considered a distinct Service.
Within that Service is two Sites, because Memphis/Shelby County uses a couple of different physical sites, each with their own set of frequencies, for more complete coverage.
Also within that System is a bunch of groups. Memphis Police is a group, Shelby County Sheriff is another group, the local prison is another group, and so on.
Within each group is a set of channels. For instance, within the 'Memphis Police' group is a bunch of channels like 'Dispatch Airways', 'Dispatch Mt. Moriah', 'Ridgeway Car-Car', etc.
So to review, channels are subsets within groups. Groups are subsets within Systems. A System encompasses an entire entity you want to scan.
All of this is so that you can keep things neatly organized, and so your alpha descriptors on the scanner display are meaningful and informative.
About Sites... A System can have a single site, or a whole bunch of sites, depending on the physical layout of the System. If the system covers a small area, there's probably only 1 site. You know, 1 tower with an antenna on it. But if the system is large, like some of those statewide systems (Arkansas Wireless Information Network, for example), then there can be lots and lots of sites, each with their own set of frequencies and other characteristics.
Conventional systems are organized in the same, elegant way. I have the City of Germantown, TN as another System. It is nothing more than a single site, 2 groups (fire and police), and maybe 5 channels in each group... each channel is an individual frequency for fire and police. When scanning, my 996T handles it just like a trunked system.
There's none of that antiquated BANK nonsense where you're always running up against hard restrictions... just a bunch of memory that slowly dwindles as you add new systems, and continually add-to your existing systems.
When you get it all in there and you see how beautiful and eloquent it all is with the single-key activating/deactivating of systems during scan, (and same with groups too!), then you'll wonder why it took them so long to come up with this system of organization.
Good luck.