Titles are usually based on area of responsibility, at a small company you may have a small number people or no people but still have the responsibility... it's just enough for one person to handle. So it's not bad to have a VP of Engineering only manage 4 ppl.... but if everyone things a VP of Engineering is the same at small or large companies that's uninformed of reality. Title inflation helps recruit... so add that on to this as well and it's confusing. Not saying it's right, but that's how it is.

Actually, there is immense title inflation at large companies as well, just depends which company and field. Have you seen the number of VPs in the Finance industry in NYC?

Exactly. The entirety of the company roster could easily be 5 people and still have someone with a title like that.