Most CMB experiments like WMAP and Planck include a certain cosmological parameter called $\sigma_8$. My understanding is that normalization of the matter power spectrum is not a theoretical prediction, but rather must be normalized by observation. So, the normalization is parameterized by this $\sigma_8$, the linear theory amplitude of matter fluctuations on 8 $h^{-1}$ Mpc scales.
How is quantity derived? Why was it chosen? Where does it come from?
How is this actually measured by WMAP and Planck, i.e. how does the angular power spectrum $C_l$ explain this quantity? How does the data give values for $\sigma_8$?