Hi Sandhya ,

Metadata
This is the base class for all metadata types. You cannot edit this object. A component is an instance of a metadata type.
Metadata is analogous to sObject, which represents all standard objects. Metadata represents all components and fields in Metadata API. Instead of identifying each component with an ID, each custom object or custom field has a unique fullName, which must be distinct from standard object names, as it must be when you create custom objects or custom fields in the Salesforce user interface.
https://developer.salesforce.com/docs/atlas.en-us.api_meta.meta/api_meta/metadata.htm

Custom Metadata 
Custom metadata is customizable, deployable, packageable, and upgradeable application metadata. First, you create a custom metadata type, which defines the form of the application metadata. Then you build reusable functionality that determines the behavior based on metadata of that type. Similar to a custom object or custom setting, a custom metadata type has a list of custom fields that represent aspects of the metadata. After you create a public custom metadata type, you or others can declaratively create custom metadata records that are defined by that type. When you package a public custom metadata type, customers who install the package can add their own records to the metadata type. Your reusable functionality reads your custom metadata and uses it to produce customized application behavior.

http://www.infallibletechie.com/2015/11/custom-metadata-types.html