Capacitive Moisture Sensor - Is AC or DC better/more accurate?
I'll resist baring anything with you, but inexpensive RH sensors are usually capacitive- using a hygroscopic (moisture absorbing) polymer. Water is a polar molecule and causes a large increase in the dielectric constant of the polymer. This same method can be used to measure moisture in a bulk material that absorbs water. 

Yes, you have to use AC to measure capacitance. There are simple circuits that can be used for this, or, as this is 2016, you could leave the hard work to IC engineers and buy a capacitance-to-digital converter chip. They will typically work up to maybe 5-10pF full scale range (changing capacitance) so the measurement cell can't be too large. Analog Devices makes some that are not EOL.