A form can't be smaller than the controls inside. For instance, let's say that you have two controls, side by side, like this:
[Text1][Text2]
If the left side of Text1 is at 0" and the right side of Text2 is at 5", then the whole form must be at least 5" wide. If you try to resize the form to be smaller, it will automatically be set back to 5" wide.