Neither, and both, is the answer.

You might think, "What is this all about?" It may sound contradictory. It is like this.

In yoga, the state where the subject, object, and action become one is the true destination of meditation. In Vedanta, Atman is neither the subject nor the object, but the whole. Since the whole is undivided, there is neither subject nor object. That is the destination, but in reality, it has been that way from the beginning, but we are not aware of it, we do not understand it, we do not recognize it, which is called Avidya (ignorance).

Now, meditation starting from such a state is, initially, either the subject or the object, or both. If it is the subject, it is concentration; if it is the object, it is observation. However, since the subject and object are always paired, if you are concentrating, there is observation. Even if you think you are observing, there is always a subject that is doing it. Even if you think your meditation is concentration, if there is an object, it also involves observation. Conversely, even if you think your meditation is observation, there is a subject that is observing. Therefore, observation and concentration are paired. That is, they are paired from the perspective of subject and object.

Here, the interpretation is that the subject is concentration, but people who practice observation meditation may not use such expressions. Instead, they might say that observing softly means there is no concentration, or that it is a slightly vague concentration. Therefore, people who practice observation meditation might say that observation is not concentration, or that it is not the main thing, but regardless of whether it is strong or weak, concentration is always present. Ultimately, it is a matter of the world of subject and object. People who practice observation meditation may object to this explanation, but it becomes unclear when using the words "concentration" and "observation," so the perspective of "subject and object" is easier to understand.

Concentration meditation: The subject is the main thing, the object is also present but weak.
Observation meditation: The object is the main thing, the subject is also present but weak.

As you can see, it is not that different, but only the focus is different, and there is a subject and an object.

The existence of a subject and an object implies duality.

Then, what is the state where there is no subject and no object? Simply put, it is a state of oneness. In yoga, it is called samadhi; in Vedanta, it is called Atman or Brahman, or Ishvara.

To achieve this state, one starts from a state of duality and aims to transcend it. This is what meditation is about.

Therefore, meditation is both concentration and observation, and it is both of these things, but at the same time, it is neither.