Small windows not only limit the light in the room, they may make the entire space look awkward. Disguising the size while still allowing in maximum light is the goal of any curtains or window treatments you choose. Garden-level and basement windows are commonly small, but narrow windows are an issue in many homes.
For windows that are wider than they are tall, hang your curtain rod above them just below the ceiling. Choose long, sheer drapes that reach the floor. The sheers still maximize the light coming in, but the length makes the windows appear longer than they are. Hang colored panels over the sheer curtain and tie back with sashes.
If the window is near the center of the wall but has a decorative sill or a built-in under it, hang curtains just below the ceiling as before but choose ones that stop at the sill. Or place a valance that reaches from the ceiling to the top of the window and hang the curtains from there. This adds length without hiding any architectural elements. Roman shades---a panel of fabric that rolls up similar to blinds---in neutral tones won't overpower other design elements but also will help camouflage the size of the window. Hang them inside the casement.
Use a curtain rod wider than the window. Hang two curtain panels from the rods. Choose full-size panels with full coverage and tie back during the day or choose narrow panels and place on either side with a neutral curtain or shade beneath. Place sash hooks far from the window sides so when the curtains are tied back the full window is visible.
Use bold finials on the rods and large rings to attach the curtains. This draws the eye from the width of the window. Sash hooks should also be large and eye catching to draw the eye to the side and away from the length of the window.
High windows near the ceiling, such as those found in basements, have their own issues. Hang sheer or light-colored cafe-style curtains for minimal coverage and maximum light. Cafe curtains puff slightly when hung so a second option is a single flat panel of fabric that doesn't pleat on the rod. Allowing in light is the primary issue with these windows.
Instead of using curtains, make the windows into an art piece. Purchase decorated window film from a craft or home store. Film comes in a large range of designs that are made to look like stained glass. Cut the film to size and stick directly on the window. This allows light in without overpowering the small window.