A mil is a unit of measurement like a degree is. There are 6400 MILs in a circle. At 1KM from a fixed point looking through binoculars that have a MIL scale in them, There is one Meter between each tick mark on the scale at the 1 KM. If you have a target, to make this easy is we will say it is 10 meters long, and you look at it with your binoculars and it is 10 MIL on the scale, your target is 1KM away, If it is 5MIL on the scale, your target is 2KM. Using this scale system, and converting it to feet and degrees, you already have a system in place to range your targets. you just have to know how big it is. Though if they gave us a MIL system in this artillery, it would make it alot easier (well for me since I have both been a gunner and an FO for 4.2inch mortars)
Now that the forward observer has a compass direction and a range, he has to pass the info to a or an artillery or mortar gunner. The mortar gunner will have to have a plotting board so they can see all the range corrections the FO is giving them and then be able to turn it so it is orientated to their directionso they can make the proper gun corrections.
There are easier ways though, you could just set up an overlay grid over a town or air strip , ETC, choose a grid like K-7 tell that to the mortar and they can try to shoot close to it and you could adjust from there.