A MICROCONTROLLER is like a human body with various organs and nervous system. The various organs execute various specific functions and are connected together by a nervous system.
Analogies to different parts of the body is as follows: The brain or CPU executes a program. The heart or oscillator provides the necessary clock for all the organs through the blood stream.
Various organs like Timers/Counters, Analog to Digital Converters, PWM generators, Digital I/O, Interrupts make the system complete. The is a data bus which helps communication between the peripherals. Memories like RAM and ROM provide the storage capabilities.
Hows it different from a mircroprocessor?
MICROCONTROLLER = MICROPROCESSOR + PERIPHERALS + MEMORY