The Latin root of percent means "per 100" and a percentage indicates the number of hundredths, or parts of 100% (which is the whole, or 1). 1% = 1/100 2% = 2/100 3% = 3/100.....
That depends a lot on the application. In electronic circuits, an error of 5-10% or even more is often acceptable; for some applications, you need a much greater precision - even a millionth or less...