It's highly dependant on the particulars of the map and what it will be used for.
Start by considering the the smallest feature you want to be able to resolve and the region you want to cover and work from there. If this leads to a map that's too big, you probably need to make several 'large scale' maps that are 'zoomed in' to get the details and a 'small scale' map for a lower detail overview. You need to make similar decisions with vector graphics, even if they don't have quite the same 'resolution' issues as raster images: which features are you going to draw, and how precisely are you going to draw them.
And yes, 'large scale' means a map that shows a small area, and 'small scale' means a map that shows a large area. In cartography, 'scale' refers to the scale factor and 1/2,500 is larger than 1/100,000. If it doesn't make sense now, it's something you get used to.