Me, Pharaoh and Dragon love doing small group Rps, as big group Rps tend to die quickly. I find it hard to find others with the sane interest and ideas as me. So, I was thinking maybe we can have a place for small groups. Here, is the difference.

Large Group: 10+

Group: 6-7+

Small Group: 3-5 Max.

I think it would be great and interesting to have small groups for Rps. What do you think?

You can do small group RPs in the Free/Casual/Advanced areas just fine: simply make a game and say you're looking for it to be 5 players maximum. Those sections are meant for RPs that are 3+ people, so they already encompass all of those group sizes you've listed. Breaking them up into sub-categories based on group size would make for unnecessary clutter and confusion.

Perhaps another kind of tag that could be introduced, if tags are the way this is going?

An potential issue with "tagging" a RP as small or large (aside from the usual just state it in the IntChk as normal) could be that a RP which was intended for a small group has evolved into a big one. Or that a big one has now declined and been turned into a small one. So if there's a subform for sizes I think it would just end up getting messy and I'd rather see sizes dictated by writing content, not size content. Tags may be the way to otherwise but even then, they could be misleading and or annoying to change down the line. I dunno.

When the proposed tagging system is implemented, it would only be natural to have it possible for GM to remove tags as well as add them, right?

We agree with the above. adding extra sub-sections for group sizes would not be practical or provide a clean, uncluttered look. Besides, where some consider 3-5 to be small, others might have the numbers be 3-6 or 4-5 or... And some wouldn't just split it to large/small. Some would split it to small-medium-large, or perhaps tiny-small-medium-large-massive. There's simply too many ways to divide such up to have a clear system based on sections.

If anything, the more logical sub-division would be by RP genre. But just a quick look at the more common genres, and you see the same problem exists there. Too many.
It is, in our opinion, better to wait for the proposed RP tag system to be worked out.

The vast majority of roleplays here involve 3-5 people.

As Genkai points out, when a roleplay is larger than that, it's usually emergent rather than some deliberate "Max Players" slider that the GM set.

I'm reluctant to enforce arbitrary restrictions or tags like "max players". It's just not something that can be determined outside of a conversation in an interest check or OOC.