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Relationships are used to indicate the connections from one person to another or a person to a group. Most relationships are two-way, meaning that they will show up on the screens of both connected entities (people or groups). For example, under "Jane Doe" if you show that "Jimmy Doe" is her son, on Jimmy's screen, you'll see "Jane Doe" listed as his parent.
VSys comes with a built-in list of standard relationships. You can't add to this list, but you can hide items which aren't relevant on the Setup panel, under System preferences and feature enabling.