Sprites are the 2-dimensional images which represent characters or in-game objects in 2D games.
While they can be created in any graphics application such as Photoshop or Krita, a dedicated package such as Pyxel Edit or Piskel can speed up the process and help with exporting the final artwork ready to go into your games software. This is especially true for animated sprites and for tilesheets of modular scenery/terrain.
Pyxel Edit is available for Windows and Mac downloads from https://pyxeledit.com/ as of April 2021 it remains in ‘Beta’ and is about £6 for the latest version, which will run on the latest operating systems including Windows and MacOSX 64-bit
Piskel can be used entirely online at https://www.piskelapp.com/ or downloaded for free for use offline, such as when travelling.
Sprites can be a simple image or they can be animated to created a walk or run cycle, jumping, firing, and dying animations. In isometric games you need different views of each figure, from the front, back and each side at the very least.
Tilesheets are a collection of terrain and scenery blocks which are numbered and ready to export for use in a game engine, almost like blocks of Lego.