Parallax error is an optical aberration of telescopic sights in which the point of impact can vary with eye placement. It is caused by the fact that the target does not fall on the same optical plane as the reticle. It is of primary concern for very precise shooting, such as shooting for group. Most fixed focus hunting scopes are focused at about 150 yards so if your target is at a different range you can get parallax error if your eye is not centered in the cone of vision consistently.
Maximum parallax error occurs when your eye is at the very edge of the exit pupil and for a 4x hunting scope focused for 150 yards the maximum error would be about 1" at at 500 yards if your eye was fully off center--giving the possibility of a 2 inch combined error if your eye placement varied from side to side of the field of vision. At short distances the 4x scope above would have about 2/10" error (4/10" total combined error) at 100 yards. Thus parallax error is primarily a worry for shooting groups but not in the field.
Some scopes have an adjustable objective lens that will allow you to adjust the plane of focus to your target's approximate distance thus minimizing parallax error. If your scope does not have parallax adjustment it is important to consistently place your eye in relation to the scope.
Typically, non adjustable scopes are set for the following parallax free ranges. Consult your owner's manual to verify this data for your scope.
Rifle scopes - 150 yards
Handgun scopes - 100 yards
Shotgun scopes - 75 yards
Rimfire scopes - 60 yards
Taken from
http://frfrogspad.com/index.htm