Have been seeing System Update in many of the Android phones i have made use of but yet can't still understand the essence for it...
Can someone here enlighten ME?

You see, system updates are quite essential. The reasons are : we all know that no mobile phone can be perfect, it would have one flaw or the other; things like “bugs" are almost inevitably present in every mobile device. So, system updates would fix these bugs just so that you have a better phone usage experience. Secondly, system updates add some functions to the device software, if it's a major update, some functionalities would be added on to the device, also to help improve phone usage experience.

adeboyewareez:
You see, system updates are quite essential. The reasons are : we all know that no mobile phone can be perfect, it would have one flaw or the other; things like “bugs" are almost inevitably present in every mobile device. So, system updates would fix these bugs just so that you have a better phone usage experience. Secondly, system updates add some functions to the device software, if it's a major update, some functionalities would be added on to the device, also to help improve phone usage experience.

Thanks BOSS.... My phone has two options in the system update... Online Update and Local Update. The local update writes "No Local Update detected" while the online update will only load and stop without writing anything.....