In Shakespeare's time, "compass" could have meanings that have since become obsolete, for example, "circle, circumference" (see Peter Ure's edition) and "bounds, limits, range" (see Onions and Richard III, Act III, scene 4: "Why should we in the compass of a pale (...)").
In addition, "crown" could also mean "head", as in Richard III, Act III, scene 2: "I'll have this crown of mine cut from my shoulders".
John of appears to be playing on words, since a crown in the conventional sense is circular (see the first meaning of compass mentioned above) and within the small space of Richard's crown or head, "a thousand" flatterers are trying to gain favours from the king.
In the third line, "verge" has three meanings that appear relevant "(1) compass; (2) the sphere of jurisdiction of the king's marshal, twelve miles round the royal residence; (3) a measure of land of from fifteen to thirty acres" (Stanley Wells's edition, p. 192-193). Peter Ure points out that "verge" is "a quibble on 'limit', with special reference to the metal rim of a diadem (...)". So the word is (among other things) another allusion to royal headgear and a reference to a type of jurisdiction related to the king.
In the fourth line, "waste" has its conventional meaning but also the legal meaning of "a tenant's destruction of his landlord's property" (see both Stanley Wells and Peter Ure). Note that earlier in the same scene, John of Gaunt gave his famous "This royal throne of kings, this scepter'd isle,"-speech, in which he had lamented that
This land of such dear souls (...)
Is now leased out, I die pronouncing it,
Like to a tenement or pelting farm:
So the legal meaning of "waste" probably also refers back to these lines.
How can the "waste" caused by the flatterers be as big as the country, as the fourth line implies? For the answer to this, we need to look back to an earlier line spoken by John of Gaunt to Richard II:
Thy death-bed is no lesser than thy land
John of Gaunt describes the flatterers' influence on the king as an illness and this illness affects the entire country.
- Onions, Charles Talbut; Eagleson, Robert D.: A Shakespeare Glossary. Enlarged and Revised Throughout by Robert D. Eagleson. Oxford: Oxford University Press, 1993.
- Shakespeare, William: King Richard the Second. Edited by Stanley Wells. The New Penguin Shakespeare. Harmondsworth, Middlesex: Penguin, 1981.
- Shakespeare, William: King Richard II. Edited by Peter Ure. The Arden Shakespeare. London: Routledge, 1994.