Olympus E-M10 IV has a 20.0MP Four Thirds (17.4 x 13 mm ) sized CMOS sensor and features TruePic VIII processor. On the other hand, Nikon D40X has a 10.0MP APS-C (23.7 x 15.6 mm ) sized CCD sensor and features Expeed processor.
Olympus E-M10 IV's sensor provides 10MP more than Nikon D40X'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 E-M10 IV and D40X sensor size comparison.
Sensor Size and Resolution Comparison image of Olympus E-M10 IV and Nikon D40X Cameras
As seen above, Nikon D40X has a 1.6x Larger sensor area than Olympus E-M10 IV. 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.