Get out your geometry protractor and your ruler (or your kid's).
Put the protractor on a piece of paper and put a penny about an inch away. Using the ruler, draw lines out from the center of the protractor, one touching each side of the penny. Count the degrees from one line to the next as indicated by the edge of the protractor. Now move the penny back about four inches and do the same thing.
Notice how there are rather fewer degrees indicated on the second (more distant) test? That means that the penny, when farther away, takes up less room in your vision. It is "smaller" in your line of sight.
A good book on optical illusions can discuss this more fully. I'm sure there are web sites that discuss it, but I'm having problems with keeping dual browser pages open today, so you'll have to do your own search.
and enter optical illusion