In computers, encoding is the process of putting a sequence of characters (letters, numbers, punctuation, and certain symbols) into a specialized format for efficient transmission or storage. Decoding is the opposite process -- the conversion of an encoded format back into the original sequence of characters.

What is difference between coded and encoded?

They have slightly different connotations which you may want to pay attention to: coded is more frequently used to describe the action of coding (in past tense), while encoded is often first interpreted as an adjective describing something that has been, well, encoded.

What device is encode and decode?

A codec is a device or computer program which encodes or decodes a data stream or signal. Codec is a portmanteau of coder/decoder. In electronic communications, an endec is a device which acts as both an encoder and a decoder on a signal or data stream, and hence is a type of codec.