The attitude of a boat in the water can largely be controlled by trimming the outdrive/propeller unit in relation to the boat's stern.
When the drive is trimmed up, the prop exerts more force downward, causing the bow to lift out of the water.
Conversely, when the drive is trimmed down, the force is exerted more in line with the hull, resulting in the bow riding lower in the water.
Depending on the trim angle, you can see increased or decreased speed, fuel economy, comfort, and control at a given prop RPM.
The trim gauge connects to a resistance-based sender in the outdrive's pivot.
This functions similarly to the sender in a gas tank, with the gauge measuring the sender's resistance from fully down/in to fully up/out.
This allows the operator to adjust for conditions and load quickly and easily.