The camera is a feature that is only used during battles. When you are walking around the game world it is not possible for you to be able to switch to the camera and look around your environment to spot Pokemon. When you are looking at the overhead map of your area, keep an eye out for any Pokemon that appear on the map. When you see a Pokemon, tap them and this will trigger a battle.
On the top right corner of the screen when in a Pokemon battle, you will see there is a slider that says “AR”. This is the camera toggle. If you slide this to the ON position, your phones camera will turn on and you will be able to see the Pokemon that you are battling.
There have been some issues reported with the camera use such as freezing and a weird compression of the image after the Pokemon has been captured with a Pokeball