Well, speaking about "resolution" I have to observe that your image is of poor resolution. Therefore it can not be read and it makes no point other than higher resolution would be a good thing.
Fair comment. So here's my definitions, with regard to measurement:
Resolution: the smallest resolvable change using the device. For a ruler with 10 tick marks per inch, the resolution for the average person is 0.01", or one tenth of a tick mark (estimating between ticks).
Repeatability: the tolerance band for repeated measurements of the same object. For the example of the ruler, it might be 0.02" (do you always estimate the same?). For several people using the same device, the repeatability number maybe gets larger.
Accuracy: how close the measurement is to the "true" value. Not as good for a harbor freight scale as for a starrett, even worse for the stretchy suspenders with the inch marks on them.
I used laser feedback on a machine in open air a long time ago. Superb resolution, but repeatability and accuracy not so much, because it measured lots of things besides distance (air pressure, air temperature, air composition, etc. anything that changed air index of refraction). Putting shrouds on the beam path helped a lot with repeatability, and temperature compensation helped with accuracy. For an accurate, repeatable laser, it needs to run in a vacuum bellows (unless a lot has changed since then).