In this paper, we present results from the weak-lensing shape measurement GRavitational lEnsing Accuracy Testing 2010 (GREAT10) Galaxy Challenge. This marks an order of magnitude step change in the level of scrutiny employed in weak-lensing shape measurement analysis. We provide descriptions of each method tested and include 10 evaluation metrics over 24 simulation branches. GREAT10 was the first shape measurement challenge to include variable fields; both the shear field and the point spread function (PSF) vary across the images in a realistic manner. The variable fields enable a variety of metrics that are inaccessible to constant shear simulations, including a direct measure of the impact of shape measurement inaccuracies, and the impact of PSF size and ellipticity, on the shear power spectrum. To assess the impact of shape measurement bias for cosmic shear, we present a general pseudo-Cl formalism that propagates spatially varying systematics in cosmic shear through to power spectrum estimates. We also show how one-point estimators of bias can be extracted from variable shear simulations. The GREAT10 Galaxy Challenge received 95 submissions and saw a factor of 3 improvement in the accuracy achieved by other shape measurement methods. The best methods achieve sub-per cent average biases. We find a strong dependence on accuracy as a function of signal-to-noise ratio, and indications of a weak dependence on galaxy type and size. Some requirements for the most ambitious cosmic shear experiments are met above a signal-to-noise ratio of 20. These results have the caveat that the simulated PSF was a ground-based PSF. Our results are a snapshot of the accuracy of current shape measurement methods and are a benchmark upon which improvement can be brought. This provides a foundation for a better understanding of the strengths and limitations of shape measurement methods.