Middle English smal, smale, from Old English smæl "thin, slender, narrow; fine," from Proto-Germanic *smal- "small animal; small" (source also of Old Saxon, Danish, Swedish, Middle Dutch, Dutch, Old High German smal, Old Frisian smel, German schmal "narrow, slender," Gothic smalista "smallest," Old Norse smali "small cattle, sheep"), perhaps from a PIE root *(s)melo- "smaller animal" (source also of Greek melon, Old Irish mil "a small animal;" Old Church Slavonic malu "bad").
The original sense of "narrow" now is generally restricted to waistlines (c. 1300) and intestines (late Old English).
My sister ... is as white as a lilly, and as small as a wand. [Shakespeare, "Two Gentlemen of Verona," 1591]
The sense of "not large, of little size, of less than ordinary dimensions" developed in Old English. Of children, "young, not fully developed," from mid-13c. The meaning "little or inferior in degree or amount" is from late 13c. That of "trivial, unimportant, of little weight or moment" is from mid-14c. The sense of "having little property or trade" is from 1746. That of "characterized by littleness of mind or spirit, base, low, selfish" is from 1824.
Small fry is by 1690s of little fish, 1885 of insignificant people. Small potatoes "no great matter, something petty or insignificant" is attested by 1924; small change, figuratively "something of little value" (with change in the "sum of money" sense) is from 1902; small talk "chit-chat, trifling conversation" (1751) is first recorded in Chesterfield's "Letters." Small-arms, indicating those capable of being carried in the hand (contrasted to ordnance) is recorded from 1710. Small clothes (1796) were knee-breeches, especially those of the 18c., as distinguished from trousers. Small hours (mid-15c.) were originally ecclesiastical, the minor canonical hours.
Small world as a comment upon an unexpected meeting of acquaintances is recorded by 1895. To distinguish generic from specific in phrases such as democrat with a small d, the construction is attested by 1952.