A component is a cohesive, opaque, replaceable, functional module of a larger system.
The larger system can be a hardware, software, or business system, thus a component can be a hardware component, such as a device, microchip, or circuit; a software component such as a user interface, database, or message passing subsystem; or a component can be a business unit such as payroll, provider, or shipping. (See the Wikipedia article on Systems Theory for a good overview of the full scope of the system/component concept.)
A component's functionality is specified by a set of provided interfaces.
A component provides its services to other components. In turn, a component may require the services of other components. These requirements are specified by a set of required interfaces.
A process component provides some sort of functionality to other components.
A process component is usually transaction based.
A process component is usually stateful. A service component is a like a process component except that it is stateless.
Examples:
Message Passing System
Event Handling System
Components in a service oriented architecture (SOA).
Examples:
Web serivces
A component can have subcomponents. We call these subsystem components.
Examples:
user interface
database system
business logic
Component-Container Architecture