Put simply he means he arrived over the wrong point. For example just say he was required to arrive over Oxford but instead arrived over Kidlington. How far he was away from the correct point only himself and the examiner will know that. If he recognised the mistake himself rather than the examiner having to point it out and then rectified it then that would obviously not hve beeen as bad as believing X to be Y as you said. Flying VFR navigation requires one to constantly be checking visual references outside - stopwatch/Chart and instruments. At least thats how I use to do it anyway.