As mentioned, a microprocessor is used to execute a series of steps or instructions, which collectively constitutes a 'program'.  Every microprocessor has a unique set of instructions that it can execute.  This set of instructions is known as its, well, instruction set. Every instruction on the instruction set does something unique, and has different requirements in terms of which part(s) of the microprocessor to utilize or what data to work on.

A basic microprocessor circuit has the following parts: 1) an Arithmetic and Logic Unit (ALU), which is where the arithmetic and logic operations of the microprocessor take place; 2) a data bus system where data that need to be processed are transported; 3) an address bus system that provides the address of the memory location being accessed; 4) a control unit for orchestrating the program execution of the microprocessor; 5) an instruction register/decoder where instructions are loaded one at a time and 'interpreted'; 6) a program counter that indicates the memory address where the next instruction will come from; and 7) various registers, flags, and pointers.

A microprocessor executes a program stored in memory by fetching the instructions of the program (and whatever data they require) one at a time and performing these instructions.  Memory in this context basically refers to external memory devices that complement the microprocessor and the input/output devices of the computer system. The manner in which the next instruction will be executed depends on the results of the last operation.  Thus, the output of the microprocessor depends on the instructions and the input data provided to it.

Microprocessors with different ALU designs have different arithmetic and logic capabilities.  For instance, some ALU's can handle all the basic arithmetic functions directly, while the simplest ones only perform addition and shift operations, which are also the steps used to emulate all other arithmetic functions such as multiplication and division. The logic capability of the ALU also varies from one microprocessor to another,  but almost all ALU's can perform the AND, OR and EXOR.

The instructions being followed by a microprocessor come in the form of instruction codes. Instruction execution can not occur haphazardly, and must be controlled precisely as it happens. The control unit of the microprocessor is the one responsible for controlling the sequencing of events needed for the execution of an instruction, as well as the timing of this sequence of events.  The control unit is complemented by a clock or timing generator that helps it trigger the occurrence of each event at the correct point in time.