etc/ is the place for most configuration files. There are many etc/ directories, and while they function the same, some of these directories are for specific purposes or override other etc/ directories. Most system start up commands and configuration settings go here.
This is where system configuration files go. Most user customizations shouldn't go here, since this can be updated by system processes. This explains why a process may work temporarily after adjusting /etc/. Two such exceptions of custom files that belong here are fstab and rc.conf.
System customized configurations belong here. These files override /etc/ files.
These are where emulation configuration files belong, when /etc/ doesn't apply to these specific settings.