A screw gauge has a pitch of 1.0 mm and 200 divisions on the circular scale. Do you think it is possible to increase the accuracy of the screw gauge arbitrarily by increasing the number of divisions on the circular scale?
Theoretically speaking we can increase the accuracy of screw gauge by decreasing the length of pitch or increasing number of divisions.
But practically we cannot decrease length of pitch or increase number of divisions beyond a certain limit.
So we can conclude that we cannot increase the accuracy beyond a certain limit.