iPhone 8 running iOS 15.6 does not pick up directions from Air Tag -- only general address of tagged item

Open the Find My app, then tap the Items tab. Choose the AirTag you want to locate, then tap Find . Follow the onscreen instructions and move around the space until your iPhone connects to your AirTag. Your iPhone displays the distance and direction to your AirTag.

Find your keys, wallet, and more with AirTag - Apple Support (IN)

AirTags don’t have their own GPS inside them, they use Bluetooth to communicate with iPhones in the area, which then upload the data to the Find My servers. That is why you cannot get a precise location.

SravanKrA’s advice will only work if you have a newer iPhone with UWB (Ultra Wideband) capabilities, which iPhone 8 does not unfortunately support.