What does "capacity" mean in this question?

How long have you known this referee and in what capacity

I'm filling my university application I met this question which befuddled me.

Does it mean "are you familiar with the referee"?

No. This is the fourth definition for "capacity" in the Merriam-Webster dictionary:

duty, position, role

So, possible answers to "in what capacity" here would be, for example:

• I worked with the referee at company XYZ, where we were both software developers.

• The referee was my Maths teacher at school.

And an answer to the full question "How long have you known this referee and in what capacity" would be, for example:

• I worked with [name] from January 2007 to March 2009 at company XYZ, where we were both software developers.