Depending what 3D app and/or renderer you use, you can also use a vector image (created in adobe illustrator for example) instead of a raster/bitmap as input.
In someting like illustrator you could blend between those elevation lines with a gradient and save them to a vector file format like AI, EPS, SVG, … (no pixels).
But after some quick testing this is not advised as vector images seem to get processed as 8bit images, which is too low to use for displacement. I don’t know why though, there should be no reason to limit vector graphics in such a way… Hopefully this gets adressed soon. (I tested this in 3ds max, might be that other software handles them in a better way.)
*edit: after a quick google i found out adobe illustrator only supports 8bit per channel… which explains why i couldn’t get more accuracy out of it. I hope this will change in the near future.
This is not the same as ‘vector displacement’ mentioned by Mister3D.
Yes terminology can get confusing sometimes… Just google for more info;
Vector displacementVector image/drawing