A system must have more than one element, related with logics so that they could coordinate together with each other to achieve the desired output.
The microprocessor is programmed with any of these logic instructions (AND, OR, XOR etc.) and a system is developed to do a specific task. These instructions are implanted or embedded in the device which works in a limited part of the large or complex system. So when a system with microprocessor (hardware) is inculcated with logic instructions (software) to work in a small area of large complex system, such systems are called Embedded Systems.
Embedded system like in an ATM has the ability to let users communicate with it. It can perform one or a few tasks under its area of influence. The instructions or rules are embedded in the Read Only Memory (ROM) of the system which act as a small computer, connected with the main system controlled by Real Time Operating System (RTOS).
Embedded system can also work as an independent device like in some toys, executor which plays some tunes randomly if buttons are pressed, some wall hanging which plays music when clapped or some door bells which play different tunes every time the door bell is pushed. It does not have RTOS as it is not a part of the large computer system.
* Video shown above is indicative, with full copyright to their respective owners.
There is an extensive use of embedded system in our daily lives. Some of these are: