"Does anybody really know what time it is?" asks an old song. We could paraphrase that to ask "does anybody really know the pressure of my tires?
Someone might step forward, kneel down at the tire, and then proclaim, "31.6 lbs/sq. in. exactly!"
"Really?"
"I have a digital gauge!"
"But the car's TPM system says 30."
Now let's talk about three thing: accuracy, precision, resolution, and effective resolution.
Resolution is the smallest change that an instrument claims to be able to measure. In the case of the digital gauge above, it's 0.1lbs/sq. in. The TPM is only giving a resultion of 1 lbs/sq. in. But one has to ask whether or not resolution if effective or not. Can that gauge really measure 0.1lbs differences? Probably not.
Accuracy is the ability of an instrument to give the correct result when measuring a standard. Somewhere -- probably in Gaithersburg, MD, is my guess -- the National Institute of Science and Engineering has a standard of 1lbs/sq. inch. And if you could hook your gauge up to that standard, we could see just how accurate your gauge is. (By the way, you can't do this. They won't let you anywhere near that standard. But they will calibrate a "transfer standard" that a lab may use to check your gauge.
Precision is the ability of a gauge to give the same reading when measuring the same thing many times.
It is possible for an instrument to be very inaccurate, but very precise.
It is also, surprisingly, possible to be very imprecise, but very accurate; this is possible because accuracy is assessed over multiple readings.
All of these characteristics of a measurement instrument are decoupled.
Consider a gauge that has 0.1lbs/sq. in. resolution but only 5% accuracy (which is, I suspect, typical of consumer digital tire gauges). If it reads 30.6lbs/sq. in., the actual tire pressure may be anywhere between 29.1 and 32.1. So, what good is the 0.1 resolution? That depends on whether or not the resolution is effective. If the resolution is effective, we can measure a change using this gauge. But that's really not so important for a tire gauge.
The important takeaway here is not to confuse accuracy and resolution. Higher resolution does not mean greater accuracy.
Consider a gauge with only 1lbs/sq. in. resolution, but 1% accuracy. When it displays 31 lbs/sq. in., the pressure is somewhere between 30.7 and 31.3.
Which of these two guages is better to use?
That depends on what you want to do. If you want to lower the pressure in the tire by 0.2lbs, the first (assuming effective resolution) is what you want. But to just measure the pressure, the second is better even though it won't let you proclaim tenth-of-a-pound resolution.