This report is intended to identify the necessary analytical tools to enable making value judgments for minimizing the various errors typically encountered in capacitance systems. Thus, in addition to identification of error sources, it describes the basic factors which cause the errors. When coupled with appraisals of the relative costs of minimizing the errors, this knowledge will furnish a tool with which to optimize gauging system accuracy, and thus, to obtain the optimum overall system within the constraints imposed by both design and budgetary considerations. Since the subject of capacitance accuracy is quite complex, no attempt is made herein to present a fully-comprehensive evaluation of all factors affecting gauging system accuracy. Rather, the major contributors to gauging system inaccuracy are discussed and emphasis is given to simplicity and clarity, somewhat at the expense of completeness. An overview of Capacitive Fuel Gauging operation is provided in the Appendix.