The aiming circle you see whenever you take aim at an enemy is basically that.
You can even see the circle change size when you swap weapons as you're aiming at the target, based on how accurate that weapon is.
The circle consists of 2 parts: inner and outer areas.
With any given individual projectile there is a 50/50 chance that it will go into one or the other.

So in other words:
If your sniper takes aim at someone's head, and the head fits exactly into the inner smaller circle - that is approx 50% chance the shot will land into head specifically, and then some extra 10% chance it will land on adjacent body parts that for certain will be present in the outer circle.

It is not a precise science, and that is by design. You will simply have to whiff it.

Phoenix point has 2 concentric circles used when aiming. Each ballistic projectile has a 50% chance of landing somewhere in the inner circle, and 50% between the 2 circles. A soldier like a sniper with good accuracy will have smaller circles which allows focusing all or most of the areas in the circles on the target. Imo the Phoenix Point targeting system is second to none.

The size of the Targeting Circle(s) us how. Inner Circle is 50% chance to hit. Outer is where all other rounds go, that might hit Friends, or more Foes. Or use a Cheat Mod to improve accuracy to 100% to hit.

Effective Range is the distance in tiles where a "human-sized enemy" should fit within the inner 50% circle. Accuracy bonuses/penalties increase/decrease Effective Range.
Halve the distance and it approximates a 100% chance to hit the enemy.

Which is fine for heavy cannons where hitting in the first place is effective, except in Phoenix Point you're aiming for parts based on the value of the damage a hit will cause - or banking on the 50/50 to hit one of two similar-value parts (or other enemies).
Halve it again, and you're aiming almost-precisely at a torso-sized part - but parts are often irregular and do not fit exactly in a circle, and the exact angle and even animation messes with it too.
(Hit-reaction animations only slow-mo during aiming so they will snap back to full speed while firing)