A class-based system divides key archetypes into specific, separate choices. Examples of this include D&D, Spycraft and Iron Heroes. It is most typically used for fantasy-based systems, but not always. Your choice of character class quite often determines your combat options, skills and may restrict certain items.
Finding the most optimal combination of race and class is typically munchkin territory because of min-maxing. Finding the least optimal combination of race and class is typically grognard territory because of Gygaxian naturalism.
The alternative to classes is the classless system.