Magento how will you add/remove content from core’s system.xml file?

You can do that by overriding system.xml configuration. Examples:

<config>
    <sections>
        <catalog>
            <groups>
                <frontend>
                    <label>Overriding Catalog Frontend in system config</label>
                </frontend>
            </groups>
        </catalog>
    </sections>
</config>
-------------------------------------------------------------------------------------------------------------------

<config>
   <sections>
        <payment>
            <groups>
                <cashondelivery>
                    <fields>
                        <!--changing cashondelivery payment method settings-->
                    </fields>
                </cashondelivery>
            </groups>
         </payment>
    </sections>
</config>