The modular conveyor system comprises N interconnected track sections, forming a continuous track, wherein each track section features a plurality of individually controlled coils stretching along the length thereof. Plural pallets, each having thrust producing magnets, travel independently alone the track. The track also comprises multiple linear encoder readers spaced at fixed positions therealong, and each pallet includes a linear encoder strip having a length R greater than the spacing E between the readers. Track section controllers associate the encoder strips with only one reader at any time in order to resolve the position of the pallets based on the fixed position of the readers and the relative positions of the strips in relation thereto. The section controllers also regulate and commutate the coils of the corresponding track sections in order to independently control each pallet. Communication links interface adjacent section controllers situated in adjacent track sections. The electromagnetic structure and distributed control architecture of the conveyor system enable it to independently control multiple practical pallets yet be constructed out of modular track sections, with little practical restriction on the length of the conveyor system or the number of pallets controlled thereby.