Unless you are specifically looking for a design where the architectural elements stand out, crown molding should not exceed 4 inches tall in a small room. Crown molding should compliment a space in such a way that it doesn’t take away from other design elements such as hanging pictures, furniture, and even the color of your wall.
However, if a small room has very high ceilings (which is not common), it would then be ok to increase the size of the crown molding.
The image to the right shows a nursery with perfectly sized moldings complimenting the space.
In the image below, you’ll find a bathroom with crown molding that is too tall for the space. In fact, you’ll see oversized molding all over the room. The baseboard, mirror trim, door trim and window trim are all large. So it was the intention of the designer to achieve that look, while not being traditionally proper. In my opinion, it looks great.