Megathrust earthquakes on subduction zones
Megathrust is not a particularly well defined term but in my experience it generally refers to very large earthquakes that occur on the subduction interface.

The subduction interface is the main surface which separates the overriding plate from the subducting plate and is where most of the convergence is accomodated. 


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Earthquakes occur on the subduction interface when the two plates are locked together (referred to as strong coupling) and cannot move past each other, leading to accumulation of strain which is eventually released in an earthquake. The amount of coupling on the subduction interface can vary strongly along its length. Chlieh et al., 2008 says this about the Sumatran megathrust:


  Near the equator, the megathrust is locked over a narrow width of only a few tens of kilometers. In contrast, the locked fault zone is up to about 175 km wide in areas where great interplate earthquakes have occurred in the past.


Some subduction interfaces are thought to be almost entirely decoupled and do not generate megathrust earthquakes but large earthquakes can still occur on splay faults in the accretionary prism (Shaw et al., 2008).

With regards to the second part of the question, earthquakes are seismic waves generated by rupturing of rocks in response to accumulated stress. Every earthquake creates a rupture patch with a certain area. The 2004 Sumatra earthquake had a rupture patch that was over 1300 km long which is enormous, hence why it had a such a large magnitude. The rupture started at the southern end of the fault and propagated northwards at 2-3 km/s, taking around 9 minutes to fully rupture. The epicentre is the location of the initial rupture.

The seismic moment of an earthquake ($\mathrm{M_0}$ is related to the area of the rupture patch ($\mathrm{A}$), the average displacement on the fault ($\mathrm{D}$) and the friction coefficient on the fault plane ($\mu$) by: $$\mathrm{M_0 = \mu A D}$$