The so-called quantum size effect describes the physics of electron properties in solids with great reductions in particle size. This effect does not come into play by going from macro to micro dimensions. However, it becomes dominant when the nanometer size range is reached. Quantum effects can begin to dominate the behavior of matter at the nanoscale - particularly at the lower end (single digit and low tens of nanometers) - affecting the optical, electrical and magnetic behavior of materials. Materials can be produced that are nanoscale in one dimension (for example, very thin surface coatings), in two dimensions (for example, nanowires and nanotubes) or in all three dimensions (for example, nanoparticles and quantum dots).
The causes of these drastic changes stem from the weird world of quantum physics. The bulk properties of any material are merely the average of all the quantum forces affecting all the atoms that make up the material. As you make things smaller and smaller, you eventually reach a point where the averaging no longer works and you have to deal with the specific behavior of individual atoms or molecules - behavior that can be very different to when these atoms are aggregated into a bulk material.
Materials reduced to the nanoscale can suddenly show very different properties compared to what they show on a macroscale. For instance, opaque substances become transparent (copper); inert materials become catalysts (platinum); stable materials turn combustible (aluminum); solids turn into liquids at room temperature (gold); insulators become conductors (silicon).
Read more: Ten things you should know about nanotechnology: 3) What's so special about nanotechnology?