According to design rules, in a low-ceilinged room you should only place furniture with low backs. Following in the same vein, a small room should only have small-scaled furniture in it.
But sometimes the tried and true is not the right answer. Sometimes a really big chair in a small room feels just right. You have to think of the whole. How the room relates to other rooms nearby. How much much light there is. What would feel just too predictable.