Two conductors in close proximity form a capacitance, which is inversely proportional to the distance between them. It’s possible to use this in a distance measurement system where one of the conductors is a measurement probe and the other is the “target”. The electronic signal conditioning connected to the probe can then provide the distance between probe and target.
Probes are typically concentric tubes with a small inner conductor and a larger outer “guard” which isolates the inner conductor from external influences. The inner conductor then only “sees” the target.
The inner conductor’s size for the probe typically sets the distance which can usefully be measured. As a rule of thumb the inner conductor diameter equals the measurement range, so a probe with a 5 mm inner diameter can measure a 5 mm distance.