A: I must admit, I don't have a definitive answer to that. My Lithops do that, too, and it puzzles me as well.
When a Lithops has grown two (or more) heads instead of one, the new heads are, of course, smaller than the original one.
The two new heads have to share the space inside the old Lithops and even though the old one will probably have grown quite large during the past year, there will still not be all that much space inside for two new heads.
Lithops dorotheae growing two new heads out of one plant (on March 11, 2012)
Once they have shed the old Lithops' skin they will part slightly and from then on lead pretty much a separate life. So the difference in size is perfectly normal in this case and they will catch up within the next year.
Double-headed Lithops dorotheae on December 9, 2012
Another case in which this "shrinking" is perfectly normal is this:
If one buys Lithops in a department- or hardware store or even in some garden centers, they might not have had the best care. Some dealers will push Lithops (water them excessively and give them lots of fertilizer) so they look firm and big when they're being sold. If they're not sold soon and they continue to get this treatment, they will burst, they won't be able to let their old pair of leaves dry up and they might start to rot.
Once we buy these plants, repot them and give them the best treatment possible on our window sills and in our gardens, they will recover from this overfeeding and after the first winter they will grow a smaller body. But this is nothing more than a return to normality.
However, sometimes Lithops seem to get smaller and smaller even though they only grow one new plant body each year and even though they have been in our care for quite some time. I have witnessed this with my Lithops as well.
I'm still trying to figure out why this happens. I have two theories, though.
1. In years when winter temperatures remain very low until early spring, up until April or even May, and there's not much sunshine, Lithops will take very long to shed their old skin. In that case I always wait until the old skin is completely dry before I water them for the first time. So there is not much time left for them to actually grow during spring and summer. So they might remain smaller than the past year.
2. Maybe this slow but continuous reduction in size is a sign that these Lithops aren't watered sufficiently enough. I am always very careful with how much water I give them because I have seen plants that have been watered too much and that have burst as a consequence (the overfeeding mentioned above). I don't want to torture my Lithops like that.
But maybe the amount of water (and also fertilizer) they get is not enough and as a result they don't grow as big as they might have done the year before.
Growing Lithops really is a balancing act and even I'm still just experimenting. ;)