Septic systems are commonplace for rural residents. Most of the country, including farms and small towns and municipalities do not have city water and sewer. Wells and septic systems are commonplace for these folks.
Septic systems are terrific when they work well, but there is some level of maintenance involved, and they can cause problems if not maintained properly. Every 4 or 5 years they need to be cleaned out. There can also be issues with the drain field which must be addressed. There are many sites which offer detailed explanations of how these work. You can also look on wikipedia for more info.