@durrani @ kashif and everyone else using a PC second generation
A smaller pad won't develop more power, it will just be able to use the existing power more efficiently.
Assuming you're using a DA Polisher which is a tool with a Free Rotating spindle assembly then a smaller pad will enable this type of tool to better be able to keep the pad rotating which means it will be better able to remove small particles of paint, which is how you remove below surface defects like swirls and scratches.
This is especially true with first generation DA Polishers. With the new 2nd generation polishers like all the DA Polishes Autogeek currently offers (from where i think Durrani got his polisher), it's less of a problem because the new generation DA Polishers are ALL better at keeping pads rotating for correction work, even 6.5" and 7.0" pads.
In my own personal experience I use a PC with a 6.5 or a 7 inch pad for applying wax or a sealant since the larger pad gets the job done considerably faster and one doesn't need to apply pressure during the job.
When it comes down to taking down swirls a pad larger than a 5.5" does hamper the performance of a a PC significantly. I only se greater than 5.5" cutting or polishing pads on my Flex 3401 or my rotary. Nothing else.
Hope this helps.