Step 1: Definition of cookie.
  
A cookie is a small text file stored on the client’s computer by the web browser at the request of a website. It helps the website remember user preferences, login sessions, or other small pieces of data.  
Step 2: Analyze options.
  
- Option 1: Incorrect → The cookie is stored on the client’s computer, not the server’s. 
  
- Option 2: Correct → Only the website that set the cookie can read/modify it, and it is stored on the client system. 
  
- Option 3: Incorrect → Cookies are not created manually by users; they are generated by websites. 
  
- Option 4: Incorrect → Cookies are not security systems, though they may store authentication tokens. 
  
Step 3: Clarification.
  
Cookies improve user experience by remembering session states, shopping carts, and preferences. They are not inherently secure, and misuse can lead to privacy issues.  
  
 
Final Answer:  
\[
\boxed{\text{Cookies are stored on the client machine and only editable by the site that created them.}}
\]