**Core Concept**
Topical steroids are a class of corticosteroids used to reduce inflammation and suppress the immune system in localized areas of the body. They work by interacting with glucocorticoid receptors in the skin, leading to a decrease in the production of pro-inflammatory cytokines and an increase in anti-inflammatory cytokines.

**Why the Correct Answer is Right**
Topical steroids are commonly used to treat a variety of skin conditions, including eczema, psoriasis, and contact dermatitis. They can also be used to treat allergic reactions, such as hives and itching. The mechanism of action of topical steroids involves the penetration of the steroid through the skin, where it binds to glucocorticoid receptors in the epidermis and dermis. This binding leads to a decrease in the production of pro-inflammatory cytokines, such as IL-1 and TNF-alpha, and an increase in anti-inflammatory cytokines, such as IL-10.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because topical steroids are not typically used to treat systemic conditions, such as asthma or autoimmune disorders.
**Option B:** This option is incorrect because while topical steroids can be used to treat allergic reactions, they are not the first line of treatment for anaphylaxis.
**Option C:** This option is incorrect because while topical steroids can be used to treat some types of infections, such as impetigo, they are not the primary treatment for bacterial infections.

**Clinical Pearl / High-Yield Fact**
Topical steroids should be used with caution in children and pregnant women, as they can have systemic effects and potentially harm the fetus. It's also essential to use the lowest effective concentration and potency of topical steroid to minimize side effects.

**Correct Answer:** C. Contact dermatitis.