Scotland, ranked fifth in the world, are in Pool B alongside not only the second-ranked Springboks but also Ireland, the world's number-one team, a Tonga side boasting a number of former New Zealand and Australia players, and Romania.
With only two sides progressing to the knock-out phase of the tournament in France, every game will be crucial.
"It's been the team that has played in the main, the majority of the players have played together for a year," Townsend said of the selection for Sunday's clash.
"They’ve earned the right to start in such an important fixture because of the way they've played and trained."
Townsend named Russell, in his third World Cup, alongside Ben White at half-back, with centres Sione Tuipulotu and Huw Jones continuing their partnership in midfield.
Prolific wingers Duhan van der Merwe and Darcy Graham are joined in the back three by full-back Blair Kinghorn.
Jamie Ritchie captains the team from blindside flanker and is joined in the back row by openside Rory Darge and Jack Dempsey at No. 8.
Richie Gray and Grant Gilchrist, both of whom will be appearing at a third Rugby World Cup, combine at lock forward, while George Turner gets the nod at hooker, packing down with Pierre Schoeman (loosehead) and Zander Fagerson (tighthead).
Townsend plumped for a five-three split on the bench, opting for forwards Dave Cherry (hooker), Jamie Bhatti and WP Nel (props), Scott Cummings (lock) and Matt Fagerson (back row).
Scrum-half Ali Price, centre Cameron Redpath and full-back Ollie Smith complete the 23-strong match-day squad.
Scotland have never beaten a tier-one nation at the World Cup, something not lost on Townsend.
"It's an opportunity for us, that's the way we're looking at it," he said.
"It's the biggest opportunity you'll get: (a) World Cup game playing the world champions and we believe we've been building to our best performance."
Success, Townsend said, would be "delivering what we believe we're capable of".
"We will be tested, no doubt," said the former Scotland and British and Irish Lions fly-half.
"There will be times when South Africa have dominance, when South Africa have points on the board, and there will be times when we are unable to execute.
"We've got to find a way to win, that’s what this World Cup is about."
Townsend added that prop Ewan Ashman and scrum-half George Horne both faced 12 days on the sidelines after suffering concussions in training.
Stuart McInally has travelled out to France as injury cover for Ashman as a precaution, but he is unable to join the squad until someone is officially ruled out.
Scotland (15-1)
Blair Kinghorn; Darcy Graham, Huw Jones, Sione Tuipulotu, Duhan van der Merwe; Finn Russell, Ben White; Jack Dempsey, Rory Darge, Jamie Ritchie (capt); Grant Gilchrist, Richie Gray; Zander Fagerson, George Turner, Pierre Schoeman
Replacements: Dave Cherry, Jamie Bhatti, WP Nel, Scott Cummings, Matt Fagerson, Ali Price, Cameron Redpath, Ollie Smith
Coach: Gregor Townsend (SCO)
