Capillary action is best illustrated if you dip a thin glass pipe into water. The water level inside the pipe will rise above the outside water level. The reason of this phenomen is that the attractive forces between glas molecules and water molecules are stronger than the attractive forces between water molecules.
Capilllary action takes place in all porous materials e.g. construction material, where it can cause big problems. The capillary action always goes from bigger pores to smaller pores.