Character avatars composed of different sprites for each component (arms, legs, head) connected together through a series of joints seem to be trending lately. For example, Scrolls, Candy Crush (in the cutscenes) and the iOS Agricola game.
This system allows the characters to have movements without having to author each frame on a sprite and can look much smoother.
For example, see how the characters seem to breathe in this video? I've checked the game files, they are indeed composed of static parts, linked together through some kind of skeleton.
What is this technique called?