Fujifilm X-M1 has a
16.0MP APS-C (23.6 x 15.6 mm ) sized CMOS X-TRANS I sensor and features EXR Processor II processor. On the other hand, Fujifilm X20 has a
12.0MP 2/3-inch (8.8 x 6.6 mm ) sized CMOS X-TRANS II sensor and features EXR Processor II processor.
Another difference between these two cameras is that Fujifilm X-M1's sensor lacks 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 X-M1 and X20 sensor size comparison.
As seen above, Fujifilm X-M1 has a 6.3x Larger sensor area than Fujifilm X20. 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.