It is more expensive than hydrostatic weighing. For hydrostatic weighing, you need to get weighed, with almost no air in your lungs, underwater. It uses the fact that fat is lighter than water, so you weigh less in water than in air. This also gets to aroun d 2-3% accuracy.

Calipers are another way to measure body fat, but they take a skilled practitioner to get a good level of accuracy.

Bioelectrical Impedance is the method used in body fat percentage scales. An electric signal will travel from hand to hand or foot to foot. A faster signal means more muscle – and this can be even 4-5% accurate.
If you are dehydrated though, the result will be less accurate.

BMI charts are a rough idea but I would say they are quite inaccurate for people further from the “normal” weight.