An encoder is a sensor on, say a motor (also known as a shaft encoder) that allows the position and/or velocity to be sensed. A form of feedback.

An encoder is essential if you want to control a motor. In the control theory sense.

They work in a variety of different ways, some sensing tiny magnets spinning by with Hall Effect sensors, some detecting slots in a disc as they pass through a break-beam sensor (an infrared emitter and detector on opposite sides of a channel), some just simple, cheap, and inaccurate potentiometers.

But how do you tell direction? Well that's beyond the scope of this course, but you'd need something like a quadrature encoder.

An encoder is a piece of software which converts one data format into another. There are many different categories of encoders, for instance: there are audio encoders, which translate between formats of audio. Within the audio encoder category, there are many different encoders specific to each format, such as an encoder for Ogg Vorbis, MP3, RealAudio and so on.