Both Nikon AW120 and Olympus TG-4 have 16.0 MP resolution sensors but Nikon AW120's sensor is 1/2.3-inch (6.17 x 4.55 mm ) and Olympus TG-4's sensor is (1/2. ).
Since Nikon AW120'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 Olympus TG-4.
Below you can see the AW120 and TG-4 sensor size comparison.
As seen above, Nikon AW120 has a 0.0x Larger sensor area than Olympus TG-4. 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.