Both Fujifilm XP120 and Olympus TG-850 iHS have 16.0 MP resolution sensors but Fujifilm XP120's sensor is (1/2. ) and Olympus TG-850 iHS's sensor is 1/2.3-inch (6.17 x 4.55 mm ).
Since Olympus TG-850 iHS's has a larger sensor area with the same resolution, this means that it also has a larger pixel area hence better light collecting capacity for a given aperture compared to Fujifilm XP120.
Below you can see the XP120 and TG-850 iHS sensor size comparison.
As seen above, Olympus TG-850 iHS has a infx Larger sensor area than Fujifilm XP120. 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.