That’s my understanding too. Think of super Mario.

Entity is Mario, the koopa troopers, the coins, the clouds, the floor tiles, the spikes, the mushrooms. All the proper nouns.

Component is the XY location in the world, ability to jump, sprite image, the height, are they affected by gravity. All the adjectives.

System is gravity - all entities with weight drop at the same rate until they hit ground. Another system may be the collision mechanic - if a mario entity lands on a koopa entity, the Koopa dies and some sound effects plays.