You can delete a custom entity, but system entities cannot be deleted.

Deleting a custom entity deletes all records of that entity. Associated records, such as notes, may also be deleted depending on the Cascade Delete property of the entity relationships. Ensure that you no longer
need the data before deleting an entity.

Deleting a custom entity
To delete a custom entity, follow these steps:
1. In the navigation pane, click on Settings.
2. In the Customization group, click on Customizations and click on Customize the System to open the default solution.
3. Click on the Entities component and select the entity that you want to delete.
4. In the solution toolbar, click on Delete.
5. Click on OK to confirm if you want to delete the entity and all its records.
Managed properties
If you export your solution as a managed solution, the Managed Properties options enable you to control whether or not some properties of your entity can be modified after the managed solution has been imported into another organization.