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Systems-of-systems are designed to provide a capability that their constituent systems cannot achieve individually. A key property is that the constituent systems have some degree of operational and managerial independence. The concepts of capability and independence are thus central to the field of systems-of-systems. Yet the contemporary literature and standards only give vague definitions of these terms. This vagueness is a barrier to progress in the field, and this paper aims at contributing with a more detailed conceptualization. It describes a system capability as a state-transforming process that uses certain resources. Independence means that the system has a choice about when and how its capabilities should be activated. This requires that the system is an intelligent agent with a notion of utility, a perception of the world around it, and a decision-making capability. When given a mission, the system can complete that mission by activating appropriate combinations of capabilities. A system-of-systems can decompose its mission into parts that correspond to the capabilities of various constituent systems.