Lets explain in the terms you understand,
when you have to make "katta" for your pet buffaloes and have a peter engine to spin the blade, you have to choose the right pulley to get the correct "chakkar" of the blade, otherwise the blade can stall and cause injury. Larger blade spins slower if the peter engine pulley is kept same. (Use this same thing to understand gearing too - gannay ka russ machine also is same concept)
large tires wont kill the diff unless you are trying to do burns outs in your truck - then the diff breaks from stress as the wheels are heavier (more torque required to spin) - the speedo will be out of sync also as the larger wheels have lesser rpm for a given speed.
larger and smaller means - total diameter of complete wheel and tire assembly.