According to Reference.com, industrial-level vernier calipers usually provide a precision to one thousandth of an inch. In metric units, the precision is to a hundredth of a millimeter, or 10 micrometers.
Vernier calipers work by using two graduated scales. The first is a main scale which is similar to a ruler, and the second is a special graduated scale, called the vernier, which slides alongside the main scale. This vernier scale provides readings of a fraction of a unit on the main scale.
Vernier calipers can be used to measure both internal dimensions and external dimensions, and some varieties can also measure depth.