Canon SX170 IS has a
16.0MP 1/2.3-inch (6.17 x 4.55 mm ) sized CCD sensor and features Digic 4 processor. On the other hand, Olympus E-M1 III has a
20.0MP Four Thirds (17.4 x 13 mm ) sized CMOS sensor and features TruePic IX processor.
One other difference between these two cameras that is worth mentioning is that Olympus E-M1 III's sensor doesn't have an anti-alias (Low-Pass) filter. Removing anti-alias filter increases the sharpness and level of detail but at the same time, it increases the chance of moiré occurring in certain scenes.
Below you can see the SX170 IS and E-M1 III sensor size comparison.
As seen above, Olympus E-M1 III has a 8.1x Larger sensor area than Canon SX170 IS. 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.