I would explain using a simple setup.
Consider a mass
m is raised to a height
h above the ground on Earth. Find the speed of the mass when it is just about to touch the ground.
If I choose the system to be just the mass, the weight of the mass is an external force and I need to consider work done on the mass.
The system only has kinetic energy, NO GPE.
I would write the conservation of energy as
Change in the energy of the system = Work done on the system
Change in kinetic energy = weight time height
21mv2−0=mgh ------(1)
If I consider the system to
mass and Earth, then the system would have KE and GPE. The work done on the system would be zero because the weight of the mass is an internal force NOT external force.
The conservation of energy would be
Change in the energy of the system = Work done on the system
ΔK+ΔUgpe=0 ------(2)
(21mv2−0)+(0−mgh)=0 ------(3)
GPE arises when there is an interaction between two masses. Potential energy is always associated with a system of two or more interacting objects.If you rearrange (3), you would get to (1). But you have to know how to interprete them correctly. This is why I say a common confusion.