Why does the Windows registry exist?

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this is more OS architecture question than programming directly, but still. Why was the Windows registry created as a completely separate subsystem for storing system/application settings? In *nix OS'es there is /etc directory which is perfectly understandable, as filesystem is a natural hierarchical way for storing settings, while Microsoft decided to create a completely outside hierarchical subsystem, which seems to be a foolish investment, why didn't they just use a filesystem hierarchy?

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