When you create a new document you need to give it a size in pixels (width and height). The documents we work with are just for the computer so we keep the resolution/quality at 72 dpi.
If you're in a document and you want to change the canvas size, you can go to the MODIFY menu or if you have nothing selected, your Properties panel will show the options for your document and you can click on the Canvas Size button.
Canvas is the area you work on, what is visible in your final result.If you change the canvas size, you are adding to the work area or removing (cropping) part of your picture. You are not actually changing the size of what you see.
If you change the image size, it will change everything to be smaller. You can do this under MODIFY>Canvas>... or click with the black arrow off the canvas and you'll see it in the Properties panel.