USUALLY the piston manufacturer will state the clearance necessary and the cylinder is bored to the appropriate dimension. The clearance given may vary depending on the use of the engine. The correct way to do this is to measure the piston diameter at the point specified by the piston manufacturer, then adding the necessary clearance and boring/honing the cylinder to that spec. Obviously the bore first has to be inspected/measured to ensure that sufficient boring is done to eliminate any taper in the bore and any scoring that may have occurred. Once it is determined what THAT minimum dimension is, a piston can be selected.
For example, you may start out thinking a standard size piston would work but subsequent bore measurement determines that, to eliminate taper, the cylinder will have to be bored to a larger size.