From the mid 19th Century until the 1930s, guitars were very personal - easy to play and handle. The rise of the guitar as part of Jazz ensembles, as accompaniment for street performers and on large concert stages led to the need for greater and "boomier" projection - which meant larger bodies and a certain loss of intimacy.
Now in the early part of the 21st Century we're re-discovering the beauty of smaller "OO" and parlor guitars. Thanks to modern electronic sound enhancement they work equally well in smaller rooms and large open venues.