Caption: How the Earth's equatorial bulge and Earth's axial rotation leads to the axial precession.
Features:
The oblate isn't very large: the Earth equatorial radius R_eq_⊕ = 6378.1 km and the Earth polar radius R_po_⊕ = 6356.8 km: the difference is only 21.3 km (see Wikipedia: Earth).
The slightly different gravitational forces are the gravitational perturbations in this case.
For example, people sometimes talk of torquing a screw.
The oscillation might be damped out in in time due to perturbations.
The Earth's rotation is the cause of the equatorial bulge via the centrifugal force.
The situation is somewhat similar to why orbiting objects don't fall inward under gravity.
They keep falling, but keep missing because they have a sideways motion or, in physics terminology, angular momentum (which is a measure of rotation).
Similarly, the axis of rotating Earth keeps trying to align perpendicular to the direction of gravity but keeps missing because the Earth has angular momentum about its axis
The "missing" is the axial precession.
But the odd effects of rotational motion are pretty commonly seen.
For example, the upright orientation of bicycles is stabilized by the rotation of the wheels and precession is exhibited by toy tops and gyroscopes.