When size of a material is as small as the de broglie wavelength of electron, their magnetic and optical properties deviate substantially from those of the bulk material. This phenomenon is quantum confinement. In such a state the band gap of a solid increases, resulting in changes of optical and magnetic properties.
Physically this phenomenon is easy to understand. Consider a conducting solid. Electrons in the conduction band behave as free particles. Their wave functions are plane waves. But when the size is made small, wave function has to be confined within it's limits. This results in discrete energy levels in the conduction band. In a bulk material, however, energy levels in the conduction band was continuous. Therefore the band gap changes accordingly with the length scale of sample.