Limited government is a government structure where its functions and powers are prescribed, limited, and restricted by law, usually in a written constitution. Related concepts are libertarianism and laissez faire economics.
"Small government" is a government structure that chooses to vest most of its power in smaller groups, such as private enterprise and its own citizens.
These terms have no legal status at this time and were coined for political reasons in response to "big government" - government involving excessive bureaucracy.
Contrast of US and UK sovereignty
This contrasts strongly with government in Britain, where government is limited by nothing more than convention.
Difference may be attributed to different conceptualizations of sovereignty. In the United States, sovereignty is thought to rest with the people; although one could argue that the Constitution is sovereign in its own right, the Constitution has legal force primarily because of its ratification by the people; closer to the people (a key concept of limited government, as discussed in Alexander Tocqueville's Democracy in America), and even if they succeed in that endeavour, their power is very different from the thought process that lead to the hierarchical model of government in the US. Devolution involves giving power to sub-entities closer to the people; this implies that the power is government's to give to people in the first place; in America, power is given to the government by the people.
Groups Advocating Limited Government Reform