An observation team was a group of observers, highly trained specialists, that were could be superficially identical to the species they were observing, allowing them to be able to blend naturally into the observed society. They were often sent in to prepare for first contact, while avoiding any potential cultural contamination.
In 2367, the USS Enterprise-D arrived at Malcor III, where Commander William Riker was sent to the planet's surface, incognito, to coordinate with the observation team that was assigned to the planet regarding the final details of contact with the Mintakans. Upon telling Mirasta Yale of the observation team, she referred to it as a surveillance team. (TNG: "First Contact")