Roundness is a measure of how closely a machined circular cross-section approaches a perfect circle.
The smaller the deviation from the ideal circle, the better the roundness (the smaller the value).
It matters especially for bearings, mating parts, and other components that must fit together exactly.
A Closer Look
Note that roundness is a separate question from whether the diameter is correct.
Even if the diameter matches the drawing, a cross-section that is slightly oval or triangular (lobed) has poor roundness.
Diameter (size) and roundness (form) are therefore quality characteristics that must be controlled separately.
Poor roundness can have many causes: spindle runout, how the workpiece is gripped, tool wear, workpiece deflection, and cutting conditions.
Isolating and addressing each cause in turn is the way to resolve roundness problems.