Larger grips may be used by players who hook the ball because of a strong hand position or over active hand action in the impact area. Golfers suffering with arthritis will also benefit from larger grips because they will not have to grip the club with as much pressure, resulting in less discomfort.
Smaller grips may be used by players who slice the ball due to a weak grip position, by making the grips smaller it will promote a better release through impact, resulting in fewer slices.
In addition, if your club feels dead in your hands, a smaller grip may provide a better feel through the clubhead.
Note: It may not just be a poor grip taken on the club that leads to wear on your golf glove. It could be incorrect grip sizing.