Applet: A small program for specific functions, which usually come with the operating system. Examples in Windows are Paint and Notepad. On a Macintosh, examples are Calculator and Scrapbook. The name comes from the term "applications" which is one variety of a software program.
An applet is just a cute name for what is generally called autilityprogram, but it's used almost exclusively in the Windows environment. A utility program is designed to do one little function, generally in the service of housekeeping for your computer system, rather than actually producing something. The term "applet," though, implies that these little programs are actually doing something practical, beyond what a utility would do.
In Java, an applet is a mini-program embedded in a Web document. When the document is downloaded, the Java applet runs the program automatically.
Microsoft employs applets in several of its Office applications to provide extra functions. For example MICROSOFT WORD employs a number of different applets that are loaded automatically when editing a graphic embedded within a document, to create fancy headline fonts, for example, or to layout mathematical equations within a document. Applets cannot in general be executed outside of their intended host program.