The Android Open-Source Project maintains the Android software, and develops new versions. Since it's open-source, this software can be used for any purpose, including to ship devices that are not compatible with other devices based on the same source.
The function of the Android Compatibility Program is to define a baseline implementation of Android that is compatible with third-party apps written by developers. Devices that are "Android compatible" may participate in the Android ecosystem, including Google Play; devices that don't meet the compatibility requirements exist outside that ecosystem.
In other words, the Android Compatibility Program is how we separate "Android compatible devices" from devices that merely run derivatives of the source code. We welcome all uses of the Android source code, but only Android compatible devices — as defined and tested by the Android Compatibility Program — may participate in the Android ecosystem.
Posted in: Android