A proportional controller inherently results in an offset error because it makes diminishing corrections as it approaches the set point, leading to a stable state that is slightly away from the desired value. The integral term in a PID controller is intended to eliminate this offset by accumulating the error over time and adjusting accordingly. To effectively set the integral term, the system must first be allowed to run to identify the offset. The discussion highlights the need for standardized terminology in PID controller setups to simplify the process. Offset error is defined as the difference between the set point and the stabilized value, such as a temperature controller stabilizing at 98 degrees instead of the target 100 degrees.