Little kids- especially girls it seems, love miniature versions of things, so tiny as a party theme strikes us as a winner. Think tiny birthday bunting with triangles an inch and a half wide, a tiny cake, and an tiny invitation enclosed inside a larger envelope.
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Other suggestions include these Tom Thumb Milk Shakes served in 2 oz cordial glasses with a straw. Grilled cheese can be cut into quarters- each quarter being one serving, and served with gherkins. Tiny art and school supplies in little bags can go home as favors.
We feel like if you start looking around in catalogs or even dollar stores, this theme can really take off.
Find the recipe for the cake shown at Martha Stewart.

Commercial Flour Sa...
We had a "tiny" party for when my daughter turned three! It was so much fun. We did mini-cupcakes, sliders, tiny tacos, all sorts of tiny things. Once you start looking you'll find there's all sorts of "tiny" food out there. :) We decorated with "tiny" balloons (water balloons!) and gave out mini birdhouses and tiny people for favors.
We're doing a tiny party for my son's first birthday next month. He weighed only 2 lbs 15 oz when he was born, and his nickname is "Teeny" so it seemed like a perfect theme. We're planning a cookout with slider burgers and other mini food, mini invites and mini decorations.
You can find lots of great "tiny" themed parties around the blogosphere for inspiration. Here are a few of the ones I've found:
http://whimsy-girl.blogspot.com/2008/09/wee-fun-at-tiny-party.html
http://thelarks.blogspot.com/2009/10/tiny-party.html
http://thepleatedpoppy.com/2010/06/tiny-party-part-1/
http://armellejewelry.blogspot.com/2010/06/tiny-party-invitations.html
http://thecreativityroom.blogspot.com/2009/04/tiny-two-party-details.html
http://www.annaleahart.com/2010/11/enzos-tiny-party.html
cornichons woul dlook like mini gherkins!
My baby shower featured mini, "baby"-sized food! We had mini corndogs, a couple cornish hens, baby carrots, and mini-cupcakes.
We did a tiny themed party for my daughter's first birthday and the thing that I loved the most were tiny party hats! Everyone loved them!