All major elections and some local elections will use some number of election observers, or pollwatchers as they are often called. Both parties have a healthy supply of pollwatchers they can call upon. In IL there's an official form one uses to identify oneself as a pollwatcher to the election judges at a polling place. Pollwatchers can check voter lists at precincts to insure that the proper voters are casting ballots there, but they also can check on a number of other polling place procedures.
I've been a pollwatcher a number of times. I've even flagged some irregularities a few times. I've pointed out voters who came to the wrong precinct, and they were in turn informed where they needed to go instead. Most irregularities were due to lack of knowledge of the detailed election rules by the election judges, and they usually corrected their procedures when they were informed. Sometimes they would check with the county authorities to confirm, and that's fine too. One time I noticed that part of a subdivision had been miscoded by the county and was voting for the wrong candidates. This isn't the type of fraud I think people are talking about, but it does influence the outcome of elections.
What you're speaking of is legitimate, sure, but what Trump seems to be doing seems very risky. He's trying to convince all his supporters that Democrats are going to steal the election, and then enlisting his supporters to go "watch" polls in this mindset? Given the nature of his base, it's not hard to see how this can go wrong. He's basically running a white nationalist campaign and he's telling his supporters to go watch, for example, in PA precincts where there will be lots of minority voters - voters those supporters probably think are cheating.
This just feels wrong and like a disaster waiting to happen.. and all so he can justify his likely eventual loss by crying about fraud.
Trump wants to energize his voters to go and f**king vote. It might be one of many ways to do it.
But yeah, it probably will also trigger KKK members to be acting like they are in charge /:
