Plain English Meaning
The altimeter doesn't always show the exact right number. The air it measures changes with weather and temperature, and the instrument itself isn't perfect, so the altitude shown can be off from what the aircraft is actually flying.
Full Definition
Inaccuracies in indicated altitude caused by mechanical imperfections in the altimeter or by atmospheric conditions that differ from the standard atmosphere the instrument is calibrated to. Common sources include nonstandard pressure (the altimeter setting), nonstandard temperature, and instrument scale or mechanical error. When uncorrected, these errors cause the altimeter to display an altitude that does not match the aircraft's true height above or above the .