Embedded system is a system Embedded in a very large system (car, washing machine, Furnace), it is just a micro controller chip and some auxiliaries like respective circuitry to place the micro controller and cables for interfacing

The main difference between micro processor and controller is ,micro processor means chip on system, means it does not have memory adequate to store programs ,large data ,it does not have timers /counters, serial, parallel ports for interfacing ,interrupt controllers and some other units ,all these are placed external to processor and connected to processor through system bus

But microcontroller means system on chip, all these discussed above are inbuilt in a single chip

Micro controller contains a core for processing and Timers/counters, program, data memories, serial ,parallel interfacing ports, inbuilt interrupt controllers, A/D.D/A converters and many more

Processors are used for Generic applications, controllers are used for specific applications, as once it is programmed, it should be fixed on a system, EX: Washing Machine, Air conditioners e.t.c,

ARM, ATMEL and many more companies developing micro controllers

Ex: 8051, arm microcontrollers/processors, PIC e.t.c…