Increased Accuracy is the first upgrade of Path 1 for the Mortar Tower in BTD5. In BTD4, it is called Greater Accuracy and it is the first upgrade. It costs $170 on Easy, $200 on Medium, $215 on Hard, and $240 on Impoppable.
It shrinks the target, allowing the mortars to direct their fire more accurately. This is an extremely useful upgrade, as it almost entirely prevents the Mortar Tower's shots from strafing off target. The upgrade makes the target almost 2x as small, because it decreases the target size by 70%, in BTD4 and BTD5. In BTD6, the explosion deviation decreases from 30 to 8, for roughly 3.75x more accuracy.
The circle in the middle of all "target circles" of the Mortar Tower represents the whole possible areas where the center of the explosion may hit. It may hit closer to or further away from the complete target center, but will not stray away from the target circle in the center.
This upgrade is the only upgrade that modifies the target symbol (called a "crosshair" or "recticle" apparently). It decreases the size of the target symbol.
In Version 21.0, there is a bug whereby Increased Accuracy has absolutely no effect on Artillery Battery and Pop and Awe, as the explosion deviation remains the same whether or not the upgrade is purchased or not. The same issue happens when purchasing Burny Stuff as the upgrade above.