Where Configuration Files are Stored
The /etc directory was created as a catch-all directory to store any files that did not belong in the other categories (binaries /bin, kernel's boot boot, etc.). Most of these files were configuration files.
A configuration file usually is a local, plain text (as opposed to binary) file which controls the operation of a program.
passwd: Contains a line for each user and its associated information (home directory, shell, user identifier UID, group identifier GID, …)
group: Contains a line for each system group, its GID and the users that belong to it. System group database.
shadows: The users encrypted passwords as well as its time validity.
hostname: Name of the host computer.
hosts: Contains the list of IP addresses and their hostname translations.
Files ending with .conf: Files that configure systems' aspects or particular services (resolv.conf for DNS, apache.conf for web server, …)
Files ending with .d They contain configuration files that will be imported by other programs. This is the evolution of the .conf files and it's meant to make the configuration process modular.