Difference between MBCS and UTF-8 on Windows

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I am reading about the charater set and encodings on Windows. I noticed that there are two compiler flags in Visual Studio compiler (for C++) called MBCS and UNICODE. What is the difference between them ? What I am not getting is how UTF-8 is conceptually different from a MBCS encoding ? Also, I found the following quote in MSDN:

Unicode is a 16-bit character encoding

This negates whatever I read about the Unicode. I thought unicode can be encoded with different encodings such as UTF-8 and UTF-16. Can somebody shed some more light on this confusion?

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