Difference

Integration testing is a logical extension of unit testing. When two units that have already been tested are combined into a component and the interface between them is tested. A component, in this sense, refers to an integrated aggregate of more than one unit. In a realistic scenario, many units are combined into components, which are in turn aggregated into even larger parts of the program. The idea is to test combination of pieces and eventually expand the process to test your modules with those of other groups. Eventually all the modules making up a process are tested together.

Integration testing identifies problems that occur when units are combined. Testing of integrated modules to verify combined functionality after integration. Modules are typically code modules, individual applications, client and server applications on a network, etc. This type of testing is especially relevant to client/server and distributed systems.

System testing: Entire system is tested as per the requirements. Black-box type testing that is based on overall requirements specifications, covers all combined parts of a system. System testing of software is testing conducted on a complete, integrated system to evaluate the system's compliance with its specified requirements. System testing falls within the scope of black box testing, and as such, should require no knowledge of the inner design of the code or logic.

System testing is performed on the entire system in the context of a Functional Requirement Specification (FRS) and/or a System Requirement Specification (SRS). System testing tests not only the design, but also the behaviour and even the believed expectations of the customer. It is also intended to test up to and beyond the bounds defined in the software/hardware requirements specification.