Confusion on the ideal M16/AR-15 zero abound because people don’t understand how their sights work.
Army and Marine doctrine is a 300 meter no wind zero. This point blank setting is often called a BZO or battle sight zero. The elevation markings on the rear sight were made with this zero in mind.
Because this BZO creates a maximum ordinate of about a half foot some people recommend a 200 yard zero as an “improvement”, which can be established using an POA/POI at 50 yards for the initial intersection. Still others suggest zeroing at 100 and leaving it.
A savvy marksman can use any of these zeroes and keep the markings on the drum intact. The M16A2 and newer have rear sight adjustable for windage and elevation with two apertures. The older technical manual (TM 9-1005-319-10, page 47) illustrates this pretty well. The current manual (TM 9-1005-319-10, ZEROING PROCEDURE, section 11, page 01) still shows this but is not as clear.
First, slip the elevation so you have four minutes of angle of adjustment BELOW the 300 meter setting. This is four clicks with a M16A2 or A3. Note the 300 meter setting is the rear sight all the way down with the “3” centered on the port side. Rotating this up a full revolution (25 minutes of angle) goes from 300 to 800 meters. When the sight is all the way up there is an “8” indicating the 800 meter elevation setting. It is marked 8/3 but is not “eight thirds” (or is it a compound fraction 2-2/3?) as non-shooters call it.
Detachable issue sights, as found on the M16A4 and M4, are half minute per click. Given 25 clicks for a complete revolution, this yields only 12.5 MOA above 300 meters. It takes 12 minutes (3 + 4 + 5) to go from 300 to 600 meters so the sight is marked to 600 (6/3) This detachable sight should be slipped for elevation to have eight clicks (four minutes) below the 300 meter setting.
Typically, a 200 meter zero is two MOA below 300 and 100 meter zero is one MOA down from 200.
One MOA above 300 meters is POA/POI at 25 meters, so initial zeroing can be done there. A 200 meter zero (2 MOA below 300) is POA/POI at 50. 100 meter zero is 3 MOA below 300. With a properly adjusted rear sight the markings are still correct.
AR-15.com has picture tutorials on how to do this:
When you have 4 MOA of adjustment below the 300 meter setting you can zero dead on at 200 or 100. Go 2 MOA down from 300 for a 200 meter zero and 3 MOA down from 300 for a 100 meter zero. Click to 300 for a doctrine BZO. Zero at 25 meters set 1 MOA above the 300 meter setting.
There are two rear sight apertures. Zero with small peep sight. With a 300 meter BZO flip to the larger aperture marked 0-2. On issue sights this larger aperture has its center lower than the smaller aperture, thus lowering your point of impact, in effect creating an “improved” zero for closer range shooting. Some after market sights are machined to have the centers of both aperture at the same point. If you don’t know, shoot a group with both apertures to see what POI change is present.