An integrated circuit (I.C.) is a group of components which may include resistors, low value capacitors and transistors printed on a silicon chip. The individual components of the I.C. make up a commonly used circuit. The circuits can range from simple voltage regulators to audio chips for a head unit to a microprocessor for a computer.

Op-Amp:
The schematic diagram below (taken from THIS datasheet) shows the internal components printed on a tiny piece of silicon inside an LF353 op-amp. The circuit shows one of two channels in the 8-pin DIP package. The image below the schematic show the actual package which contains all of the component parts shown on the schematic and a single small signal transistor. On the schematic diagram we can see that there are more than 20 small signal transistors which make up the op amp circuit. The package of the single transistor measures approximately .18" square. The measurements of the 8 pin I.C. are approx. .4" x .35". You can see that the I.C. is much smaller than 20 transistors would be. Inside of microprocessor for a computer, there are literally millions of transistors. I.C.s allow electronic devices to be much smaller and much less expensive than they would otherwise be.

The following image is a dual op-amp that's been forced open. The tiny rectangle near the center of the plastic body is the silicon die. They're able to print all of the transistors, resistors, capacitors that make up the dual op-amp in that tiny area. The only reason that it's so large is to make it easier to handle. This may seem tiny but technology is at a point where they can print 1500+ transistors (such as those used in computer microprocessors) across the width of a human hair.