Ki detection is the ability to read a fighters powerlevel, Even though you can't detect there "exact" powerlevel, it gives you a sense of how strong they are and whether they are good or evil.

At the start of Dragonball Z Furiza's minions, including Vegeta, Nappa, Radditz, the Ginyu Force, and Furiza himself, used scouters to tell how strong a fighter was, in other words detecting there Ki.

Later on when alot of the scouters started being destroyed, during battles, and other various ways; Fighters started using there sense to detect Ki's "powerlevels". This begins happening once Vegeta leaves his battle on Earth and starts his hunt for the Namek Dragonballs.

Once Goku lands on Namek he uses his Ki detecting skills to sense who is where and how strong they "really" are. He does this by just flying and picking out there powerlevels or Ki.