What is the potential compass error caused by nearby iron metal?

The potential compass error caused by nearby iron metal is termed deviation. This type of error occurs because the magnetic field generated by ferromagnetic materials, such as iron, can distort the magnetic field that the compass relies on to indicate true north. This distortion leads to the compass needle pointing away from the true magnetic north, resulting in inaccurate readings.

In contrast, variation refers to the difference between magnetic north and true north due to the earth’s magnetic field, which is a natural phenomenon and not influenced by nearby metallic objects. Magnetic dip, on the other hand, pertains to the angle that the earth's magnetic field makes with the horizontal plane, which is principally affected by the geographical location rather than iron presence. Horizon alignment relates to visual or observational factors, not magnetic influences. Therefore, deviation is the correct term for errors induced by nearby iron metal affecting compass readings.