Well it's under "miscellaneous" because it isn't user-installed apps, music, photos or videos. Seriously, that's all that "misc" means.
I've a strong suspicion that this is normal for your phone. Is it an 8GB model, by any chance? The problem is that when manufacturers quote the storage they give the total storage installed on the device, not the amount of storage available to the user (not just Android, all phone manufacturers do this). So the space allocated for system software (the ROM, the kernel, the radio firmware, etc) and the system cache partition all come out of that total, and hence it's quite normal for an 8GB phone to only have 4GB available to the user. And the numbers I see there sum to a little less than 8GB, so my guess is that most of that "system data" is actually your operating system, system apps and low-level firmware, or possibly just the size of the partitions allocated to them.
If I'm right about this, there is nothing you can do about it. If the phone has a "move to sd" option in Settings > Apps > Downloaded (select an app and see whether that button is there) you may be able to make a bit more space that way: it only moves part of the app, not all apps allow it, and it should not be used for any app whose widgets you use (they will stop working the next time you reboot), but it's something. However it's not been officially supported by Android for some years now, so it will only be there if LG have added it back. Otherwise you have to either live with the space available or root the phone if you want any other options.
One of our moderators wrote an app called
storage truth, which will give a clearer picture of what's going on. The partition called /data is the space that's actually available for user-installed apps and data, so the size of that is the important thing.