The core function of a unit's Size is to determine how much space they take up in a square. Battlefield squares can hold only 10 size points.
Size has various other effects, however.
Units with the Trample ability will displace enemies instead, dealing a minimum of 1 damage to them in the process. The Size gap only has to be 1 or greater in this case, and the displacement drives out all enemy units in the square – unless they're killed, of course. The Size of the Trampler does not affect the chance of being smushed for additional damage– this is determined entirely by the target's Defence Skill without their Shield parry– but it does add to the smush damage. Note that Tramplers do not displace allies unless they're in a rout, since their displacing always does damage.