Basically, the “boundary” is simply an imaginary dotted line drawn around the volume of a something in which there is going to be a change in the internal energy of that something. Anything that passes across the boundary that effects a change in the internal energy of that something needs to be accounted for in the energy balance equation. That “something” can be the volumetric region surrounding a single atom resonating energy, such as Max Planck defined in 1900, it can be a body of steam or air in a steam engine, such as Sadi Carnot defined in 1824, or it can be the body of a tropical cyclone, such as Kerry Emanuel theorized in 1986 in the field of atmospheric thermodynamics, or it can be a single nuclide, i.e. a system of quarks, as some are theorizing presently in quantum thermodynamics.
For an engine, a fixed boundary means the piston is locked at its position; as such, a constant volume process occurs. In that same engine, a moveable boundary allows the piston to move in and out. For closed systems, boundaries are real while for open system boundaries are often imaginary.