/etc is the et cetera directory. By convention, this is the location for the local sysadmin to make configurations to the system. This will be where user applications get the default system settings before being overridden and where system applications are configured. Beyond those configurations, there is also some data like where groups, users, password hashes, and system keys stored.
Since /etc is used to modify the system state, you need super user privileges to modify files in the directory usually by default.
Generally speaking, /usr is where a distribution puts its default configuration, /etc is where the local admin modified behavior.
