An equation of time display shows the difference between true solar time and “mean” solar time. For convenience, humans have defined the a day as 24 hours. But because Earth’s orbit isn’t quite round and because it sits on 23-degree axis, any particular day may be slightly more or less than this 24-hour average.
It's calculated by: (a) adding up the number of people who care, (b) multiplying that by the number of people who can't afford a perpetual calendar but still wanted something that looked complicated, and (c) dividing that number and shoving it up your ass.
The equation of time is typically displayed on a watch by indicating the difference (plus/minus minutes) between true solar time and mean solar time. Because of the astronomical knowledge it takes to execute this complication, it’s often combined with other astronomical or calendar complications.