This was a spectacular South American Xenoarthan, and it is distantly related to the strange tree dweller sloths that we still have today. Megatherium would have been rather unintelligent and instinctively agressive to make up for this. They were primarily herbivores, though they could use their unmatched power to steal carrion - even from a full pack of Smilodon.
They possessed ossicles in their skin, essentially, pieces of small bone reinforcing the skin from underneath- acting like inpenetrable chainmail (indeed there are legends and tales of South American hunters in folklore, coming across an animal, within the last few thousand years perhaps, that had 'a hide no arrow could pierce') They also had three massive clawed fingers, which may have been used both to claw down branches for them to browse on the leaves of, and also secondarily to defend itself from or even attack other animals such as Sabre-Toothed Cats. They had long shaggy coats of fur, which was similar to that of mammoths on appearance.
These animals lived in South America for several million years, before the South American continent drifted northwards and the North American continent drifted southwards into each other, around 3 Million Years Ago. This was to be known as the Great Faunal Interchange; with many North American animals like Racoons, Horses, Deer and most importantly Sabre-Toothed Cats, moving into South America over the new Central American landbridge, and with many uniquely South American animals such as these Giant Ground Sloths, Giant Armadillos (Glyptodonts), and most importantly the infamous Terror-Bird Phorusrachids, moving into North America in turn.
Megatherium is known to have successfully settled into North America, where bizarrely like many of the southern migrants, they did even better than they did in their original homelands in which they had evolved, and in fact possibly lasted a few thousand years more. (However, it is likely that the very, very last of the Megatherium, still probably hung on till the end in the thickest jungles and caves of South America.) It is argued over greatly, the approximate extinction date of the Megatherium. Temptingly, we have even found skin and hair samples in caves, and we have dated these to within the last 10,000 years.
All said and done, it is probable that Megatherium had been around for this long; 3 Million - 6,500 Years Ago. It is possible they may have existed to within centuries of the present day, but such evidence is non existant and the claim is entirely conjectural (though due to the vastness of the continent and its jungles, and the relatively small human presence over the last few thousand years in them, it is not that unreasonable to assume.)