So I'll try and get this to make as much sense as possible.

1988 defender 90

The fuel gage is intermittently faulty.. Sometimes it reads what I think is the correct level, sometimes it reads dead empty then sometimes it reads full. Mostly it reads fairly empty. All these changes happen within a couple of miles of driving down the road no real reason it should change either.

Don't know where to start. Faulty gage, bad wiring, bad level in the tank?

Any help greatly appreciated!

Well you need to establish a direction so I'd do a bit of a visual first then I'd get the multimeter out and start measuring things. If the wiring between the sender and gauge is good then it has to be one of those components, so I would then find a way to mimic various fuel levels and see what the meter says.

Yes, get a MM if you haven't got one but for now inspect the wiring and terminal connections at the sender, it's all a bit exposed there and can suffer.
If you pull the wire off the sender and earth it, the gauge should read full.
All the sender does is vary the amount of 'earth' the gauge receives in simple terms.

Start off by checking your earths from the battery through the earth straps to the engine and chassis, and then check the +ive feed to the gauge which IIRC is either green or green with a brown trace.