A data type organizes related data in an application and a Integration Layer links the data to the system of record. Generally when we are fetching the data from external system data from external system will be mapped to integration layer and then to Data layer and then to application like cases.
Data type represents the common data elements (For example Properties) which can be shared among the applications that were defined. If you define the data-type then in your work class you just need to create the page or page list property and just refer to this data-class and on expanding the created property in the work class, you can see the properties that were there in the data type.
A data type is nothing but a data class which stores the data in the dedicated table. If you check the test connectivity of the data class definition we can find that it points to the dedicated table. If you define the local storage for the data-type then you can add the data for the declared properties and it will create the Data-pages accordingly which you can find in the data-type.
Here the system of record refers to the data which was defined in the storage of the data-type.