Pen tracking is the tablet's interpretation of the physical position of pen.
Pen tracking accuracy is how close the the operating system cursor (mouse pointer) is to the physical tip of the pen.
Note that this accuracy must be measured without taking into account the effect of parallax
Also this must be measured when the pen is NOT moving - because pointer lag by definition causes a kind of dynamic inaccuracy
Perfectly accurate pen tracking means the tablet thinks the pen is exactly where the physical tip is. Any deviation from that is an inaccuracy.
However, all tablets are slightly inaccurate.
Pen tracking accuracy is a concept that applies to both pen tablets and pen displays.
However, in practice it is only really an issue with pen displays. This is because with pen displays you can see the inaccuracy - which shows up as the operating system pointer being offset from the tip of the pen.
If your pen's position is not matching where the pointer is in a major way especially if it is happening across most of the tablet, then pen tracking calibration may help.
The pointer is generally a bit more offset from the tip of the pen toward the edges and especially the corners rather then the main part of the screen.
This offset in the edges and corners is totally normal. Some tablets have more and some have less.
Tablet manufacturers (except for Wacom) often publish their official corner accuracy numbers. Here are some typical values I've seen.
±3mm
±1.5mm
±1mm
If you have a pen display and it seems to exceed what the manufacturer says it has and you are disturbed by it, you should contact support.
For myself, generally even if I see ±3mm it isn't really a problem because I am not drawing in those areas. But of course, it does look weird and I would like it always to be more accurate and do prefer ±1mm.