We present a general approach to quantum entanglement and entropy that is based on algebras of observables and states thereon. In contrast to more standard treatments, Hilbert space is an emergent concept, appearing as a representation space of the observable algebra, once a state is chosen. In this approach, which is based on the Gel'fand-Naimark-Segal construction, the study of subsystems becomes particularly clear. We explicitly show how the problems associated with the partial trace for the study of entanglement of identical particles are readily overcome. In particular, a suitable entanglement measure is proposed that can be applied to systems of particles obeying Fermi, Bose, para-, and even braid-group statistics. The generality of the method is also illustrated by study of the time evolution of subsystems emerging from restriction to subalgebras. Problems related to anomalies and quantum epistemology are also discussed.