The issue has to do with drainage and getting air to the roots somehow... The ground (unless heavy compacted clay) can wick away water thanks to its composition. Whereas an actual container has a finite number of holes - normally on the bottom with none usually on the sides, thus water isn't wicked away as easily so there is a different type of dynamics going on.

If you fill a very large container with a material that holds very little water, is almost all inorganic in composition, and is very porous, then you can probably get away with putting a small plant in that large container. The plants roots won't lay in soggy soil and rot - simple as that. In this case however, you'll need to make sure that the plant gets the nutrients and water it needs to survive and thrive, which may mean daily watering. Many successfully grow bonsai trees in this type of material, although the art of doing so often demands a small container to help in dwarfing.

The more organics, the more water that might remain, and the less you have to water. However if the mix can't wick away excess water fast enough and the plant hasn't colonized enough of the container's volume with roots to absorb that water, then it has a potential to have its small amount of roots suffocate. In a smaller pot, this is less of an issue.

Basically, it's looking for that right balance - depending on your growing conditions (amount of light, temperature, watering practices) and the plant's normal habit (surface rooting vs tap rooter, etc), and past experiences (including successes and failures), to be able to "right size" a pot for a plant.

As an example - over a decade ago, I innocently took an 18" tall baby lilac and threw it right into a 21" container of soiless container mix and it did fine. But after trying that with some other plants (eg., azaleas), this failed. Lilacs are fast growers, throwing down a significant tap root, and quickly colonizing the pot with many feeder roots, whereas azaleas are slow growers, putting out surface roots that would have taken many years to completely colonize that size pot.

So after learning about the plants themselves and knowing my own environment, I tend to slowly pot up plants known to be surface rooters (hydrangeas tend to be this), and will go for the gusto with tap root plants.

Bottom line - there's nothing stopping you from putting that hydrangea in a very large pot right off but you will need to be mindful of the mix that you use, the drainage of the pot, and your own watering practices, so that you don't kill it with "kindness".

Jenny, great explanation, I learn that hard way by killing few baby hydrangeas by re-potting them to 3-5G pots from 4" pots.

You might find it interesting that Dan Hinkley recommends putting a gallon sized hydrangea directly into a 15 - 25 gal container of bark based medium for best results...then changing the potting medium every three years or as needed.
No moving up of pot sizes in between.

Thank you so much for the very easy to understand explaination. I had always wondered about this question. Guess I'll put the large pot away for a couple of years and try something smaller at first. I would have been heartbroken to have killed this lovely hydrangea through my ignorance!

Like any other piece of gardening advice, the restriction on pot sizes is just a guideline. Jenny's info is quite correct - too much soil mass surrounding a not-well-developed root system can lead to problems if drainage is restricted, however if you use a high quality potting medium with lots of variation in pore size (inclusion of perlite, pumice, turfac, chunky bark pieces), there is little concern. I grow a great many plants in containers of all sizes and with very few instances, have potted up smaller plants directly into the sized container I prefer without worry. A 2 gallon Mme Emile Moulierre went directly from that size into a half whiskey barrel without any problems. The same with any number of conifers and smaller trees (Japanese maples). The key is drainage - if you are assured drainage in the container is sharp, then you are free to pot up accordingly.