Use an empty glass/bottle and a jug of water to help show capacity. Start by discussing how the bottle is empty as it has nothing in it. Then slowly start to pour the water in to the container and stop at each of these intervals below to discuss how much it olds.
Now show two cups of water with different amounts in. Which cups holds more water? Repeat this a few times.
Finally, using two different containers discuss how the larger container has a larger capacity due to it being able to hold more. Use a few different examples making sure each time to discuss which container has the most/least capacity.