Nanomaterials have provided some of the greatest leaps in technology over the past twenty years, but their relatively early stage of maturity presents challenges for their incorporation into engineered systems. Perhaps even more challenging is the fact that the underlying physics at the nanoscale often run counter to our physical intuition. The current state of nanotechnology today includes nanoscale materials and devices developed to function as components of systems, as well as theoretical visions for "nanosystems," which are systems in which all components are based on nanotechnology. Although examples will be given to show that nanomaterials have indeed matured into applications in medical, space, and military systems, no complete nanosystem has yet been realized. This discussion will therefore focus on systems in which nanotechnology plays a central role. Using self-assembled magnetic artificial cilia as an example, we will discuss how systems engineering concepts apply to nanotechnology.