Four Thirds is a family of digital camera products produced to a standard originally devised by Olympus Corporation. The Four Thirds consortium has several affiliated partners, but the most active and visible are: Olympus Corporation, Panasonic (Matsushita Electric Industrial Co.), Sigma Corporation, and Leica Camera AG. Other corporations publicly affiliated with the Four Thirds platform include Sanyo, Fujifilm and Kodak. Sanyo is a major OEM manufacturer of digital cameras, once reportedly to be the biggest digital stills camera manufacturer, by volume, in the world. No obvious practical contribution has been revealed from Fujifilm. Kodak, until recently, was the main supplier of image sensors for Four Thirds cameras. That role has now been taken over by Panasonic.
At its launch the Four Thirds camera system was the only digital stills camera system featuring interchangeable lenses that was not based on a system from the film era.
The name 'Four Thirds' refers to the size of the imager in relation to a traditional industry video camera tube sizing standard and means 4/3rds inches. It is purely coincidence that the frame aspect ratio used by Four Thirds cameras to date is 4:3 instead of 3:2, as in traditional 35mm film cameras, although Panasonic has embraced the flexibility in the standard and produced cameras with Multi Aspect Ratio sensors that enable different frame formats to be used without simply cropping the default format.
The diagonal measurement of the Four Thirds frame, or the image circle diameter, is approximately half that of a 135 format 'full frame'. This means Four Thirds cameras have 50% focal length equivalence factor compared to full frame 35mm. Therefore, a 50mm Four Thirds lens will have the same field of view as a 100mm full frame lens. This is exactly the same with Micro Four Thirds because the sensor size is the same as Four Thirds.
A benefit of the smaller Four Thirds sensor size is that lenses can be much smaller; as little as half the size of full frame lenses of the same focal length and brightness (maximum aperture). This benefit is even greater, especially for wide angle lenses, with Micr Four Thirds because the distance between the lens mount and the sensor plane is shortened in the absence of the need for a reflex mirror box.
Also, because the sensor is relatively small it enables the lens mount to be relatively large, therefore enabling Four Thirds lenses to be designed more optimally for digital imaging sensors using optics that can be described as telentric.
It's easier to make very fast (bright) lenses would be very large and heavy in equivalent full frame form. For example, Olympus produces a professional specification medium zoom lens that is equivalent to a full frame 70-200mm. It is similar in size and weight as a 70-200mm f/2.8 zoom, but its maximum aperture is f/2.0, one whole stop brighter. There are several other Four Third lenses that have no full frame equivalent because there simply aren't any such lenses that are as bright for the same field of view. especially at the telephoto end of the range.
Depth of field differences between Four Thirds and Micro Four Thirds can be both advantageous and disadvantageous depending on your needs. The smaller sensor of Four Thirds means that for an equivalent field of view there is greater depth of field compared to a full frame lens at the same aperture setting. If you are a landscape photographer, for example, the extra depth of field could be considered an advantage, especially if poor light means you can't stop the lens down to ensure more depth in a scene is in sharp focus. However, it is harder to limit depth of field for effect, in order to achive very blurred-out background bokeh. At f/2.0 the depth of field exhibited by a Four Thirds lens will be equivalent to that of a full frame lens of the same field of view but with an aperture of f/4.0. It's certainly not impossible to blur out backgrounds with Four Thirds lenses, but you need to use larger apertures where possible or longer focal length lenses. In the same way, it's not impossible to get good depth of field to ensure everything is in focus when using a full frame camera but it's easier with Four Thirds.