This is a good and very common lighting question.
Take the width or diameter of your island, then subtract 12 inches from that number. That will be the maximum limit for the width or diameter of a light to hang above it. Know that fixtures with a lot of detail in their design can actually look bigger than they really are, so do keep that in mind with your colonial lantern. I assume you're hanging just one and not a pair or trio of them in this case.

If you need more tips on light sizing, try this: http://www.squidoo.com/choosing-the-right-size-for-light-fixtures