Observance means acting in accord with tradition, duty, law, or custom: "Drivers should be careful in their observance of traffic regulations." "Some religious people are strict in their observance of dietary laws." Observance also means "taking note of: "National holidays are set apart for the observance of some notable event." An observation is an instance or act of viewing, perceiving, or regarding: "Roving policemen make a careful observation of suspicious-looking persons." "Try to find a good observation point from which to watch the ceremonies in observance of Veterans Day."
Dictionary of problem words and expressions. Harry Shaw. 1975.