Olympus TG-870 has a 16.0MP 1/2.3" (6.17 x 4.55 mm ) sized BSI-CMOS sensor and features TruePic VII processor. On the other hand, Panasonic G9 has a 20.0MP Four Thirds (17.3 x 13 mm ) sized CMOS sensor .
Another difference between these two cameras is that Panasonic G9'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 moire occurring in certain scenes.
Below you can see the TG-870 and G9 sensor size comparison.
As seen above, Panasonic G9 has a 8.0x Larger sensor area than Olympus TG-870. 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.