Plain English Meaning
How far off the altimeter's reading is from the actual altitude. A small error is normal; in airspace where aircraft are stacked closely, that error has to stay very small.
Full Definition
The difference between the altitude an altimeter displays and the aircraft's true pressure altitude. In RVSM operations, total altimetry system error must remain within tight limits (typically ±200 feet under standard conditions) so that aircraft flying 1,000 feet apart vertically remain safely separated.
Context Anchor
Seen in Reduced Vertical Separation Minimum (RVSM) operations, where aircraft at high altitudes are allowed to fly with less vertical space between them and must keep very accurate altitude information.