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thetriangman
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21 pin decoders tend to have more functions associated with them. Take the average Hornby 8 pin decoder, two pins are assigned to motor control, two to power input to the decoder, one function common wire and the rest to the four functions(one wire isn't assigned a pin is just a bit of wire), there are nine wires on the decoder. The Hornby decoder is a four function decoder although only two of the functions are what is called independant functions, the other two functions are direction of travel lighting functions(numbered 1&2 on the decoder sheet).
Fine for most jobs but if you have a loco that you want to control an individual light on say left hand tail light at one end, and you already have the four functions of say a Hornby decoder wired up, then you need more functions, this is where some thing like an 8 function 21 pin decoder would come in. Having more pins for more functions essentially to control more stuff.
Hope that helps Mike.
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