Not just group size plays along, but also the understanding of the group with regards to the subject in question. A group of 20 morons will probably make far worse decisions than a group of 300 geniuses. Similarly, a group of 100 factory workers is likely to know better what's needed in the factory they work in than a handful of desk clerks who never set even set foot near the production line.

Basically, "democracy" according to the classic Greek or Icelandic model works only in very specific circumstances. In all other cases, at least some form of non-elected hierarchy is needed to keep things running.