Mastering the System Timer:

The primary difference is that a Hardware Timer is a physical, silicon-based electronic component embedded within a microchip, whereas a System Timer (often called a Software Timer) is a virtual clock managed entirely by software or an Operating System (OS).

In a modern computer or microcontroller, a limited number of physical hardware timers act as the foundation. The system software uses them to generate a steady, virtual “heartbeat” (ticks), allowing developers to spawn hundreds of system timers on top of just one physical timer. Hardware Timers

Hardware timers are dedicated electronic peripherals (like registers and prescalers) built directly into a processor or System-on-Chip (SoC).

Software delay vs hardware timers – Electronics Stack Exchange