What is -
1) Range of C you have to measure
2) Resolution of measurement
3) Accuracy desired
I plan 0.5 mm resolution, but accuracy is not my first duty. First i will observe capacitance change, second with change of capasitance, i measure distance. After these steps, i think about accuracy
The magnitude of the C you want to address is important. If its large simple
ways to measure C with a current source and ramp the C to a V and time
that Q = C x V, I = C x dV/dT, C = ( I x dT) / dV.
If the C is quite small, a few pF to 10's of pF, a ac bridge approach may be more
appropriate to measure Z and compute C from that.