A microcontroller is an integrated circuit designed to govern specific operations in an embedded system. It contains a processor, memory, and input/output components on a single chip. Microcontrollers are used to control functions in devices like appliances, vehicles, and electronics. Common types include PIC, ARM, 8051, and AVR microcontrollers which come in configurations like 8-bit, 16-bit, 32-bit and 64-bit. The Raspberry Pi differs from a microcontroller in that it is larger, uses more power, and can run both 32-bit and 64-bit operations while microcontrollers are designed for embedded applications.