I don't know what the letters stand for. Actually, I've asked the same question about /etc myself here, but nobody responded. /etc contains all of your configuration files. /var contains system log files, but possibly other things, too, that I don't know about.
BTW, 'filesystem' usually refers to one of NTFS, FAT32, ext2, ext3, reiserfs, and the like. I gues your usage is fine, but might be a little confusing. How about 'directory structure' or 'directory tree' or something?