One place where the word 'capacity' is used is in the translation of The Jewel Ornament Of Liberation:
All sentient beings have Buddha-nature. That being the case, do all beings in the five realms, such as hell beings, hungry ghosts, and so forth, have the capacity to work toward enlightenment? No. Only a “precious human life,” which has the two qualities of leisure and endowment, and a mind which holds the three faiths, has a good basis to work toward enlightenment. The summary:
Leisure and endowment,
Trust, longing, and clarity,
Two of the body, and three of the mind—
These five comprise the excellent working basis.
In Sanskrit, “man” is purusha, which translates as “capacity” or “ability.” Hence, a human life with the qualities of leisure and endowment provides the capacity or ability to attain either the temporary high realms or definite goodness; therefore, it is called purusha. Furthermore, there are three different types of ability: the inferior, mediocre, and superior. As it says in the Lamp for the Path to Enlightenment:
One should understand that there are three different types of person: Inferior, mediocre, and superior.
An inferior person has the ability to attain a human or god realm without falling into lower realms. It is said:
One who makes effort, by any means,
To achieve the pleasures of samsara
For his own benefit—
This is called the inferior person.
A mediocre person has the ability to attain the state of peace and happiness by freeing himself from samsara. It is said:
One who turns his back on the pleasures of samsara
And abstains from nonvirtuous deeds,
But who is interested only in his own peace—
This is called the mediocre person.
A superior person has the ability to attain Buddhahood for the benefit of all sentient beings. It is said:
By seeing the suffering within one’s own mind-stream, One yearns to completely exhaust the suffering of others— This is called the supreme person.
By first cultivating the mind of supreme enlightenment and then persistently training, one will go through all the paths and levels of a bodhisattva. Explanation of the path follows. The summary:
The path of accumulation, the path of application,
The path of insight, the path of meditation practice,
And the path of complete perfection—
These five comprise the explanation of the paths.
The five paths according to the Lamp for the Path to Enlightenment: First, the paths establish a foundation through study and practice of the Dharma of lower and middle capacity persons, then cultivate the mind of aspiration and action bodhicitta, then they gather the two accumulations. These clearly explain the path of accumulation. “Then one gradually attains the heat and so forth” explains the path of application. “Obtain the level of Great Joy and so forth” explains the paths of insight, meditation, and perfection.
One of the passages above says "capacity" a translation of the Sanskrit purusha, for which Wikipedia says,
Purusha (Sanskrit puruṣa, पुरुष) is a complex concept whose meaning evolved in Vedic and Upanishadic times. Depending on source and historical timeline, it means etc.
The abstract idea Purusa is extensively discussed etc.
There is no consensus among schools of Hinduism on the definition etc.
To me personally I guess I relate the word "capacity" to this story (A Cup of Tea): relating "capacity" with emptiness (which is a Taoist notion, e.g. that it's the empty space within a house that makes the house useful).