I’ve usually heard observing described as simply not following your thoughts, and letting them pass, possibly even “labeling” them. Not getting caught up in following them. When I meditate, I’m constantly becoming aware that I’m lost in thought, over and over again. So when I realize I’m thinking/lost in thought, I just observe that I was thinking and then go back to the breath. Don’t judge yourself for getting lost (that’s just more thinking), just go back to the breath. Hope this is somewhat helpful!

“The mind commands the body and it obeys. The mind orders itself and meets resistance.”

Practically, I would recommend learning about chakras and meditating on them moving from the bottom up over the course of a 5–10 minute meditation and build from there.