When perceiving a faraway object as smaller, despite knowing it's the same size as a closer one, this refers to the principle of size constancy. It is the tendency for our brains to perceive an object as maintaining its size even when viewed from different distances.
Related terms
Depth Perception: The ability to perceive objects in three dimensions and judge their distance.
Visual Illusion: A misleading or deceptive perception that occurs when our brains misinterpret sensory information.
Perceptual Constancy: The tendency for our perceptions of objects to remain relatively stable despite changes in sensory input.