What is an isolated system in Newtonian mechanics?

What is an isolated system in Newtonian mechanics? Is it a system on which the net external forces and torques are $0$?

Consider a man lifting a heavy suitcase from the floor and placing it on an almirah. If we consider the man and almirah together as the system, the energy is conserved. There is no change in the kinetic energy of the suitcase. The increase in potential energy of the suitcase comes from the work done by the man against the force of gravity. But if we take the suitcase only, the energy is violated.

Should we call the $\text{man + suitcase}$ system isolated? Is it true that only for isolated systems energy is conserved?

An isolated system has no external forces acting on it.

Taking the floor (and the Earth) and the suitcase as the system it can be considered isolated in some circumstances where the effect of the Sun, planets, moons etc can be neglected.
The man does work increasing the distance between the suitcase and the floor and this results in an increase in the gravitational potential energy of the floor-Earth-suitcase system.
Energy is conserved.

The suitcase by itself is not an isolated system as it has forces on it due to the Earth and the man.
Whilst the separation between the floor and the suitcase is being increased the two forces are acting on the suitcase.
The gravitational force of attraction on the suitcase due to the Earth downwards and the upward force that the man exerts on the suitcase.
If those two forces are equal in magnitude then the net force on the suitcase is zero and so the net work done on the suitcase during the process of lifting is zero.
You can think of this as the man doing positive work on the suitcase (force and displacement in the same direction) and the gravitational force doing an equal amount of negative work on the suitcase (force and displacement in opposite directions).
So the suitcase does not gain or lose any kinetic energy.
Energy is conserved.

An isolated system should properly have no external forces or torques, not just no net external forces or torques. The man + suitcase system isn't isolated in any case because gravity and the normal force of the ground are both external forces, and the normal force of the ground is not the same as the force of gravity- thus why momentum is not conserved in the system.

Energy and momentum are conserved for isolated systems. They are not necessarily conserved in non-isolated systems (although one or the other can be).