Not only does the estimated size of your target need to be precise, but the way you bracket the target must be precise as well. Most folks who use mill dots for range estimation observe a greater errors at ranges beyond 500 yards which I believe is due to the inability to bracket the target precisely. This might be due to the target blending into its background, mirage, a moving target, or a target which is not straight or is partially obscured making it appear smaller than it actually is, or insufficient magnification.
Here are some dimensions that are good to know. Each mil dot is .75 of a mil. 1 mil equals the distance from the center of one dot to the center of the next dot. 1 mil equals 36" at 1000 yards or 3.6" at 100. The distance from the top of one dot to the bottom of the next dot equals a quarter of a mil. When estimating range, estimate 10 divisions between the center of one dot and the center of the next dot. Range estimation in yards = target height in inches X 27.778 divided by the number of mils. So for a target 60" tall the formula would be 60X27.778 divided by the number of mills, lets say 1.6, which rounds off to 1041 yards, if you've calculated the tenths of a mil correctly.