MICROCONTROLLER

A microcontroller (also microcontroller unit, MCU or µC) is a small computer on a single integrated circuit consisting of a relatively simple CPU combined with support functions such as a crystal oscillator, timers, watchdog timer, serial and analog I/O etc. Program memory in the form of NOR flash or OTP ROM is also often included on chip, as well as a typically small amount of RAM. Microcontrollers are designed for small or dedicated applications. Thus, in contrast to the microprocessors used in personal computers and other high-performance or general purpose applications, simplicity is emphasized. Some microcontrollers may operate at clock rate frequencies as low as 4 kHz, as this is adequate for many typical applications, enabling low power consumption (milliwatts or microwatts). They will generally have the ability to retain functionality while waiting for an event such as a button press or other interrupt; power consumption while sleeping (CPU clock and most peripherals off) may be just nanowatts, making many of them well suited for long lasting battery applications. Other microcontrollers may serve performance-critical roles, where they may need to act more like a digital signal processor (DSP), with higher clock speeds and power consumption.
Microcontrollers are used in automatically controlled products and devices, such as automobile engine control systems, remote controls, office machines, appliances, power tools, and toys. By reducing the size and cost compared to a design that uses a separate microprocessor, memory, and input/output devices, microcontrollers make it economical to digitally control even more devices and processes. Mixed signal microcontrollers are common, integrating analog components needed to control non-digital electronic systems.

EMBEDDED DESIGN:
microcontroller can be considered a self-contained system with a processor, memory and peripherals and can be used with an embedded system. (Only the software needs be added.)[1] The majority of computer systems in use today are embedded in other machinery, such as automobiles, telephones, appliances, and peripherals for computer systems. These are called embedded systems. While some embedded systems are very sophisticated, many have minimal requirements for memory and program length, with no operating system, and low software complexity. Typical input and output devices include switches, relays, solenoids, LEDs, small or custom LCD displays, radio frequency devices, and sensors for data such as temperature, humidity, light level etc. Embedded systems usually have no keyboard, screen, disks, printers, or other recognizable I/O devices of a personal computer, and may lack human interaction devices of any kind.
OTHER MICROCONTROLLERS:

Since embedded processors are usually used to control devices, they sometimes need to accept input from the device they are controlling. This is the purpose of the analog to digital converter. Since processors are built to interpret and process digital data, i.e. 1s and 0s, they won't be able to do anything with the analog signals that may be being sent to it by a device. So the analog to digital converter is used to convert the incoming data into a form that the processor can recognize. There is also a digital to analog converter that allows the processor to send data to the device it is controlling.
In addition to the converters, many embedded microprocessors include a variety of timers as well. One of the most common types of timers is the Programmable Interval Timer (PIT). A PIT just counts down from some value to zero. Once it reaches zero, it sends an interrupt to the processor indicating that it has finished counting. This is useful for devices such as thermostats, which periodically test the temperature around them to see if they need to turn the air conditioner on, the heater on, etc.
Time Processing Unit (TPU) is a sophisticated timer. In addition to counting down, the TPU can detect input events, generate output events, and perform other useful operations.
A dedicated Pulse Width Modulation (PWM) block makes it possible for the CPU to control power converters, resistive loads, motors, etc., without using lots of CPU resources in tight timer loops.
Universal Asynchronous Receiver/Transmitter (UART) block makes it possible to receive and transmit data over a serial line with very little load on the CPU.
For those wanting Ethernet one can use an external chip like Crystal Semiconductor CS8900A, Realtek RTL8019, or Microchip ENC 28J60. All of them allow easy interfacing with low pin count.