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A term I will use when im talking about sanding is feather-edging. Say for example you have a scratch that goes down to your primer. When sanding this out, you want to sand the whole area around it as to avoid sanding a low spot in the paint where it was at. With feather edging, you want to step out all the layers of paint, primer and anything else that is there(hopefully nothing else!) A good guide to go by when feather edging is to try to sand each layer out so you can see each individual ring of primer, paint, clear, etc... You probably wont see the actual layers of paint(say the paint had 3 layers then clear) but you will want to be able to see it all. Run your hand flat across the surface to feel if its smooth, keeping it flat will make any bumps more noticeable than running a finger over it. Note, feather-edging isn't only applied to scratches, but many other things such as rock chips, its just a term used for a sanding technique.
