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Hello,
As I've stated earlier, Arduino is an extension or Development of a Micro-controller on a Board with other peripherals for help, hence, it is a Development Board.
A micro-controller is fixed over this board, hence, it is a part of Arduino.
Arduino has advantages like USB-USART, Runs on low voltage. LEDS for indication, Very less external circuits required for many projects etc
So, basically, Arduino is an extension of Micro-controllers & so, it has more advantages.

For me, the biggest advantages are speed and ease of development. The open source nature of Arduino has led to the availability of dozens of "shields" (i.e. daughter cards) that facilitate such things as Internet access, wireless networking, data logging, and device control. Another big advantage is the Arduino IDE which allows software development on all major platforms (Mac, PC, Linux) with an easy-to-use subset of C/C++.

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