I read -most of- the contributions, I liked several, but none of the ones I 5read mention pixel size.
I have a Panasonic (Lumix)point-and-shoot with 6megapixel, recently purchased a Nikon -for the brand-name and the 15x lens. They have the same size chip -really tiny- the difference is that Nikon stuffed more pixels in the same size chip, consequently the Nikon chips are smaller than the Lumix.
When processing the pic. Nikon also compresses it more than the Panasonic, thus the pic. is smaller in megabytes, although it presumably has twice as many pixels.
Since the Nikon has smaller pixels and higher compression, the pictures ae actually less sharp and the color are less vivid. So I went back to my Lumix, whic may have less pixels in the similar size chip, and with less compression the pictures are sharper and have better color reproduction.
In photography, some of the terms from negatives continue to be used, thus we have SLRs with 35mm size chips, APS-c size etc.
Of course the larger chips accommodate larger and/or more pixels, which give better pictures.
The main reason Nikon and Canon reduced the number of pixels in recent models was to have larger pixels, which translate to reduced "noise," better color and sharpness, and in some models dramatically increased light sensitivety. Some of the APS and full size (meaning 35mm equivalent) chips can take photos in very dark settings