I have an application that runs on an embedded Linux device and every now and then changes are made to the software and occasionally also to the root file system or even the ins
I believe you are looking wrong at the problem - any update which is non atomic (e.g. dd a file system image, replace files in a directory) is broken by design - if the power goes off in the middle of an update the system is a brick and for embedded system, power can go off in the middle of an upgrade.
I have written a white paper on how to correctly do upgrade/update on embedded Linux systems [1]. It was presented at OLS. You can find the paper here: https://www.kernel.org/doc/ols/2005/ols2005v1-pages-21-36.pdf
[1] Ben-Yossef, Gilad. "Building Murphy-compatible embedded Linux systems." Linux Symposium. 2005.