Large area high throughput metrology plays an important role in several technologies like MEMS. In current metrology systems the parallel operation of multiple metrology probes in a tool has been hindered by their bulky sizes. This study approaches this problem by developing a metrology technique based on miniaturized scanning grating interferometers (μSGIs). Miniaturization of the interferometer is realized by novel micromachined tunable gratings fabricated using SOI substrates. These stress free flat gratings show sufficient motion (~500nm), bandwidth (~50 kHz) and low damping ratio (~0.05). Optical setups have been developed for testing the performance of μSGIs and preliminary results show 6.6 μm lateral resolution and sub-angstrom vertical resolution. To achieve high resolution and to reduce the effect of ambient vibrations, the study has developed a novel control algorithm, implemented on FPGA. It has shown significant reduction of vibration noise in 6.5 kHz bandwidth achieving 6x10-5 nmrms/√Hz noise resolution. Modifications of this control scheme enable long range displacement measurements, parallel operation and scanning samples for their dynamic profile. To analyze and simulate similar optical metrology system with active micro-components, separate tools are developed for mechanical, control and optical sub-systems. The results of these programs enable better design optimization for different applications.