They used the word "change" in the paragraph before the one you quoted. I think by "observation" in this paragraph, they mean "x_i - M(x)" as in https://en.wiki

They used the word "change" in the paragraph before the one you quoted. I think by "observation" in this paragraph, they mean "x_i - M(x)" as in https://en.wikipedia.org/wiki/Average_absolute_deviation https://en.wikipedia.org/wiki/Average_absolute_deviation: the difference between the current value and some measure of central tendency (mean, median, mode). It's not explained well, but if you make this assumption, the article makes sense.