A microcontroller unit (MCU) is essentially a computer-on-a-chip. Most MCUs pack a RISC (reduced instruction set computer) processor, RAM (random access memory), flash ROM (read-only memory) and additional I/O (input/output) devices.
MCUs are not powerful in terms of processing power. However, for each unit of power consumed, they are usually quite efficient. For example, the AVR line 8-bit processors only consume about 0.1W of power at 16MHz, but the RISC architecture executes instruction at close to 16 MIPS. This makes the processor much faster than the original IBM PC/AT!
In an embedded application, the most important asset of an MCU is the high degree of integration. An MCU require very minimal external circuitry to complete an embedded controller. This module discusses how to design a simple embedded controller.