Services
A service is a process that launches at startup and may receive IPC messages from any process.
System services
System services are native applications. They have system permissions and as such are allowed to perform any task. Their purpose is to allow processes to perform specific actions like permissions management or filesystem access without hunging up the kernel.
Each system service is a system application, exposing a service. Most also expose command-line tools.
You can get more details about how services work in the specifications document.
You can find the list of system services in their specifications directory.
Application services
Application services, also called userland services, are provided by applications themselves.