It's a bit unclear to me when you talk about "error" in PID control

The error is the difference between the reference operating point and the current operating point. In the cruise control example, the reference operating point is the desired speed, and the current operating point is the current speed. So if you want a car to go 60 mph (reference) and it's only going 55 mph (current), then the error is 5 mph (reference - current).