The expressions "sink" and "source" basically refer to which direction the current is flowing when one signal is "driving" or activating another signal.
It is important to remember that most logic gates can "source" and "sink" a very limited amount of current, usually in the order of a few milliamperes, not enough to operate relays, LED's, and other devices directly.
Some logic level gates and devices can sink or source enough current for very low current devices like LED's (using a resistor to limit the current), but careful attention must be paid to the manufacturer's data on these devices so as not to destroy them by sourcing or sinking too much current.
yes it is applicable to micro controllers also...