Observance means (1) the act of complying with rule, custom, or law, (2) the act of celebrating a holiday or other ritual occasion, or (3) a customary rite or ceremony. Observation is the corresponding noun for all senses of observe not related to rules, holidays, rituals, and ceremonies.
Examples
For example, these writers use observance correctly:
Argentina’s financial markets were closed Monday and Tuesday in observance of Carnaval. [Wall Street Journal]
It recommended that clearing firms oversee traders’ observance of those rules … [Financial Times]
The CPR class was a part of Montefiore’s observance of American Heart Month. [New York Daily News]
And here are a few examples of observation in some of its many senses:
One was treated and released but one remains in hospital under observation. [CBC.ca]
Without any hard evidence, however, we’ll treat this observation much as we would a UFO sighting. [The Australian]
But the technique requires immaculate planning, precise timing and careful observation. [Los Angeles Times]
