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This is because a capacitor works on the principal of electro-statics. The closer the plates are to each other, the greater the effect of the positive and negative ions attraction across the dielectric constant. The further the plates are from each other, the lesser the attraction hence lower capacitance. Larger plate area increases capacitance also.

If you have ever taken apart an electrolytic capacitor, what you'll find is two thin strips of aluminum foil with a strip of paper between them that was soaked in the electrolytic acid. When you unroll the assembly (wearing gloves), you'll find that the plates are quite long. This makes up the surface area of the two plates, which is one of the factors that determines the capacitance.

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Q: Why capacitance decrease with an increase in distance between plates?
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