When Magnifier is on, you can use the back camera of your iPad just like a magnifying glass. In fact, it's like an illuminated magnifying glass. You see the magnified image on your screen. A slider lets you set the degree of magnification. You can also turn on a light and lock the magnification level (also at the left). At the right, the three circles let you change the colors. You can enlarge the magnification even more. Use the round button (like a camera shutter) to have the iPad adjust its focus for what you're pointing at.
You can combine magnification with your iPad's portability so that you can reach up to (or behind) an object and magnify something that would not only be too small to see otherwise or would be out of view.