This is the conventional wisdom: for a small space, light colors. Dark colors can make a space feel heavy and oppressive, and they tend to soak up light, which is usually at a premium in a smaller space. But dark colors can actually make a small space seem larger—it just all depends on how you use them.
The key is, instead of painting the entire space in a dark color, to just paint one wall (or a single element like a bookcase). Dark colors read as receding from the viewer, so the accent wall visually enlarges the space (and sets up a nice contrast that can make the rest of the space seem brighter by comparison). Let’s check out a few examples.