Encoders are the best device for tracking the position of an object. They come in 2 main types, rotary and linear. Rotary encoders track angular position while linear track position in one spatial dimension.
How they work
Encoders work by counting ticks that are spaced evenly and very close together. On higher quality encoders the ticks are closer together resulting in greater measurement accuracy.
Types of encoders
Mechanical encoders consist of a metal disc with slots cut into it which spins beneath a series of wire brushes. When the brushes are over the slot the circuit remains open, but when the brushes contact the disc they close the circuit. These are brushes at different radii and the encoder is guaranteed to have a unique pattern of closed circuits for each set step in angular position.
Because of the physical complexity mechanical encoders have to be larger than the alternatives to get the same accuracy.
Optical encoders have a similar disc to mechanical encoders except it has a number of opaque or transparent areas. Then a light source in conjunction with a set of photo detectors perform the same function as the wire brushes in a mechanical encoder. For each angular position step there is guaranteed to be a unique set of active photo detectors.