Microfiber is a synthetic material made from a blend of 80% polyester and 20% polyamide. It is usually in the form of a very tight looped terry fabric.
It is much more absorbent than cotton, hemp or bamboo but does not hold onto the liquids as well as these natural fibres. It acts like a sponge, so when compressed it can leak it's stored liquids. For this reason it is often used with a natural fibre to help stop the compression leaking.
Microfibre image from http://www.germes-online.com