In kindergarten, "capacity" in this lesson does not mean how much a cup or jug can hold. It means whether one group of objects has enough members to give one to each object in another group. For example, if there is a plate for every child at a table, then there are enough plates. If one child has no plate, then there are not enough.
This idea helps children build number sense before they even start counting large numbers. Instead of counting each group and comparing the totals, they simply pair items one at a time and watch what happens.