With numbers come also internal struggles, that weaken the whole system.
Look at switzerland or norway for example. They are small in numbers, but don't get really screwed by big corporations either.
Roughly speaking they coordinate on all major rules and policies and practices with the entire rest of the EU and therefore are effectively part of the EU for regulatory and trade purposes.
The UK on the other hand, obviously just wrapped up its Seppuku process of leaving the EU, and we're already seeing the relative increase in their being taken advantage of by corporate interests due to their much weaker position.
Switzerland and Norway take advantage of the power of the EU to push back on corporate interests, and the UK is getting kicked around as its negotiating power just went down by a factor of 10.
[1] https://ec.europa.eu/trade/policy/countries-and-regions/coun...
[2] https://ec.europa.eu/trade/policy/countries-and-regions/coun...
Why does the government needs to be big (in size?).
It just needs to be strong enough and really connected to its people it represents. Then also a very small country (with a small government) can set up and enforce clear rules on multinational companies, doing buisness within that country.
The rules just need to be simple. If they are complicated, it just means, those with the best lawers will win and they are usually working for the corporations.