The difference between true north, and magnetic north, is called Variation in marine navigation, and the very same thing is called declination among land navigators.
Remember that variation and declination are two names for the same term, just like right and starboard, left and port.
Your compass points to magnetic north, not true north........it varys X amount of degrees from true north, depending on where you are located on the planet.............variation.
In extremely simplistic terms think of the Earth as a concrete mixer, with the concrete slopping and tumbling around inside the mixer, and Earth's iron/nickel core as the concrete. As the iron/nickel slowly moves around under our feet, magnetic north also moves.
Deviation is the distraction of your compass reading from magnetic north because of the magnetic influences on your boat (wood, fiberglass, and aluminum boats) from things like steel anchors, steel chain, engine blocks, firearms, trolling motors, the magnets on radio speakers, steel knives, fish hooks, anything made of steel that can act magnetically upon your compass. Energized electric wires can also affect your compass. If DC electricity is used to light the compass, the wires should be twisted, to avoid creating a magnetic field in the wires. 316 stainless steel is non-magnetic..........304 stainless is slightly magnetic.
As an experiment, take any object containing steel or magnets, (keys, hand held radio, portable AM/FM radio, handgun) and put it close to your compass........it will swing your compass away from the natural lines of earths magnetic attraction..........it causes the compass to deviate from magnetic north.
Steel hull boats and ships are even more of a problem to adjust a compass for, because the whole hull attracts the compass. Deviation is negated as much as possible by introducing near the compass a magnetic field that is equal in magnitude, and opposite in polarity to that of the vessel. This process is called compass adjustment.
Larger vessels use a binnacle of non-magnetic metal to mount the compass in, and compass adjustors use quadrantal correctors (navigator's balls) and Flinders bars to remove most of the deviation. In most cases, all deviation cannot be removed, so a deviation card is made, by recording the difference between the vessel's compass course from that of magnetic north.
For extremely small craft, a deviation card is sufficient for most navigation purposes. If you store steel objects.......anchor and chain, etctera, as far from your compass as possible, and the compass is not mounted close to your engine, you should have very few problems with deviation.
Try this: launch your boat and find a quiet beach or sandbar you can run your boat onto. You want to beach solidly enough that your boat does not move around, but stays pointing in one direction. (Most docks contain steel; even wooden docks use steel to hold them together, and might cause additional compass deviation.)
With everything turned off.........engine, lights, radio.......everything, look at your compass reading. Now, move your anchor(s) around, and see if your compass reading changes. Start your engine..........do you see any difference? Turn on your electronics..........see any difference? Turn on your running lights and check the compass. Turn on your spotlight, if you have one, and check for any compass reading changes.
If you have no problems with any of the checks above, you can follow your compass manufacturers instructions to take some of the deviation out, with the built in adjustors. In pre-electronic days, you'd use bearings or ranges, or steer on celestial objects, to determine compass readings.
Today, if you have a simple hand held GPS, set it to read magnetic north, and run your boat on compass courses 000*, 045*, 090*, 135*, 180*, 225*, 270*, and 315*. Compare the compass reading to your GPS reading (with the GPS set to read magnetic direction) and record the results.
Most fiberglass boats, not carrying a lot of steel objects on board, should show little deviation. I doubt most small boat skippers can steer with better accuracy than 2-1/2 degrees, with most low cost magnetic compasses (under $150), because the compass card is so small.
As a parting note, a flux gate (electronic) compass can be set for zero deviation by following the manufacturers instructions with the compass, simply by swinging a 360* circle in the boat. Additionally, you can set them to allow for the variation in your operating area.
If you want to read more detailed information than this post, open this link.............................................. ........................................
and use the pull down munu to read Chapter 6 of Bowditch.