Canon 400D has a 10.0MP APS-C (22.2 x 14.8 mm ) sized CMOS sensor . On the other hand, Olympus TG-850 iHS has a 16.0MP 1/2.3-inch (6.17 x 4.55 mm ) sized BSI-CMOS sensor and features TruePic VII processor.
Olympus TG-850 iHS's sensor provides 6MP more than Canon 400D's sensor, which gives a significant advantage in real life. You can print your images larger or crop more freely.
On the other hand, please keep in mind that Max sensor resolution is not the only determinant of resolving power. Factors such as the optical elements, low pass filter, pixel size and sensor technology also affects the final resolution of the captured image.
Below you can see the 400D and TG-850 iHS sensor size comparison.
As seen above, Canon 400D has a 11.7x Larger sensor area than Olympus TG-850 iHS. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.