A system is said to be a collection of two or even more objects. An isolated system is said to be a system that makes the force free as because of the influence of any net external force which can easily alter momentum of system. You will identify two important criteria due to existence of net external force:
Conservation of mechanical energy actually states that the energy of any isolated system may remain constant along with time as long as system appears to be free for different frictional forces. When it comes to real situation, frictional forces and any other non-conservative forces can also be available. But, there are other cases which can have small effect on system and this can be used as fair approximation.