When should we call System.exit in Java

In that case, it's not needed. No extra threads will have been started up, you're not changing the exit code (which defaults to 0) - basically it's pointless.

When the docs say the method never returns normally, it means the subsequent line of code is effectively unreachable, even though the compiler doesn't know that:

System.exit(0);
System.out.println("This line will never be reached");

Either an exception will be thrown, or the VM will terminate before returning. It will never "just return".

It's very rare to be worth calling System.exit() IME. It can make sense if you're writing a command line tool, and you want to indicate an error via the exit code rather than just throwing an exception... but I can't remember the last time I used it in normal production code.

The method never returns because it's the end of the world and none of your code is going to be executed next.

Your application, in your example, would exit anyway at the same spot in the code, but, if you use System.exit. you have the option of returning a custom code to the enviroment, like, say

System.exit(42);

Who is going to make use of your exit code? A script that called the application. Works in Windows, Unix and all other scriptable environments.

Why return a code? To say things like "I did not succeed", "The database did not answer".

To see how to get the value od an exit code and use it in a unix shell script or windows cmd script, you might check this answer on this site

System.exit() can be used to run shutdown hooks before the program quits. This is a convenient way to handle shutdown in bigger programs, where all parts of the program can't (and shouldn't) be aware of each other. Then, if someone wants to quit, he can simply call System.exit(), and the shutdown hooks (if properly set up) take care of doing all necessary shutdown ceremonies such as closing files, releasing resources etc.

"This method never returns normally." means just that the method won't return; once a thread goes there, it won't come back.

Another, maybe more common, way to quit a program is to simply to reach the end of the main method. But if there are any non-daemon threads running, they will not be shut down and thus the JVM will not exit. Thus, if you have any such non-daemon threads, you need some other means (than the shutdown hooks) to shut down all non-daemon threads and release other resources. If there are no other non-daemon threads, returning from main will shut down the JVM and will call the shutdown hooks.

For some reason shutdown hooks seem to be an undervalued and misunderstood mechanism, and people are reinventing the wheel with all kind of proprietary custom hacks to quit their programs. I would encourage using shutdown hooks; it's all there in the standard Runtime that you'll be using anyway.

System.exit(0) terminates the JVM. In simple examples like this it is difficult to percieve the difference. The parameter is passed back to the OS and is normally used to indicate abnormal termination (eg some kind of fatal error), so if you called java from a batch file or shell script you'd be able to get this value and get an idea if the application was successful.

It would make a quite an impact if you called System.exit(0) on an application deployed to an application server (think about it before you try it).