Tower cap farms are pretty simple.
Just dig out a section of your map, usually one of the lower sections. You should get a nice haul of ore and gems while doing this, as well as metric fucktons of stone.
You can dump the stone into a chasm, magma, or atom smasher if you want, or make them all into blocks. Doesn't matter, but you will need to remove the stone from the area or tower caps will not grow.
Flood the area. Simplest way is a dwarf powered pump. Make sure you have some drain set up, easiest is fortifications on the edge of the map. Once the entire area is muddy stop pumping water and let it dry. If it is a very large area it could take years.
Once the water has receded get your dwarves busy hauling. This will also probably take years to haul all of that stone away.
Now that the area is both cleared of stone and also muddy, tower caps and shrubs will grow happily, and very quickly.
I recommend clearing the entire place of both tower caps and shrubs every other year or so. Just occasionally go in there and strip the place bare.
For even more wood you can build a multi-level tower cap farm with multiple levels of floor space for growing, or just make the area really huge. More muddy floorspace means more lumber!
Be prepared for your FPS to die while you are flooding and draining it, and for the very ambitious tower cap farms it can take a decade to get it ready, from start to finish.