I suppose a rough and ready definition would be visual reconciliation of the features (hills, bends in a stream, coastal shorelines, etc) shown on a map with the features visible from your position on the ground. If that big hill to my north is Mount Tremendous, and I am standing by the stream just to the south of that peak, I must be here. If so, then Crag Peak would be the hill to the west- yeah, that looks right. Mount Toil would be the mountain to the southeast - yeah, that fits. I know where I am.

Also helps in the intermontane west. You can see the Baldy Mountains in the distance and you know they are north of you. Therefore, you know where north (approximately)is without resorting to a compass.

Basically you form a hypothesis, test it by observation, confirm or reject. If rejected, try again, until everythingfits.