An encoder is a device that is used to convert a signal or certain data into code. This kind of conversion is done for a variety of reasons, the most common being data compression. Other reasons for using encoders include data encryption for making the data secure and translating data from one code to another new or existing code. Encoders may be analog or digital devices. In analog devices, the encoding is done using analog circuitry, while in digital encoders the encoding is done using program algorithms. Some examples of encoders are multiplexers, compressors, and linear and rotary encoders.

A decoder, on the other hand, functions the reverse of an encoder. It is a device that is used to decode an encoded signal or data. It does this to help retrieve the data that was encoded in the first place. Both encoders and decoders usually function in tandem, i.e., an application that uses an encoder would ideally also require a decoder. There are different types of decoders, e.g. demultiplexers.

Application of encoder&decoder

An encoder is a circuit that accepts many inputs and generates the output in a coded form.
Where as
a decoder is a circuit with no data input,but accepts only the control inputs and generates many outputs.

Encoder is a device which has 2 to the power 'n' inputs and 'n' no. Of output.It means if there are 8 inputs lines in encoder then there will be 3 outputs lines.but in decoder there is reverse process ,i.e. There are 'n' no. Of inputs lines and 2 to the power 'n' outputs lines .

Encoder is a circuit with multiple input with generates a unic address at its output that is it convert is an active input signal to a coaded output signal. If only 1 input is activated at a time. Then the encoading state forwareded and can be accomplished with gates. How ever if more them one input is active other same time a priority must be stablish and such a unit is called priority encoader.
EXP. Decimal to b, c, d encoader and octal to binary.

Simple way to say -- encoader convert to binary language and decoader decode to simple language.