A microcontroller is a small, low-cost microcomputer designed to perform specific tasks in embedded systems like displaying information on a microwave or receiving remote signals. It consists of a processor, memory like RAM and ROM, serial ports, and peripherals like timers and counters. Microcontrollers are used for single tasks in applications, have low design and hardware costs, and are easy to replace. They use CMOS technology requiring less power and include a CPU, RAM, ROM, and I/O ports. In contrast, microprocessors are used for larger applications, have higher costs, and are not as replaceable.