In an episode of Doctor Who, the Second Doctor, played by Patrick Troughton, tries to explain how the TARDIS can be bigger on the inside:

He holds up two little black boxes that are the same size, and puts one down far away on the other side of the room. Holding the other one close to his companion's face, he asks "Which box is bigger?" (For clarity, we'll call the box that appears bigger at the moment Box A.)

Then he swaps around the relative positions of the boxes. "Now which box is bigger?" Obviously, Box B is now the biggest one.
"So, if you could keep that box over there and bring it over here, that box would fit inside this one."

I presume that the inside of the TARDIS is a curled-up set of dimensions that appear normal size from within, but viewed from an alternative set of dimensions, such as those in which they are contained, feel smaller (relatively speaking). That's the theory, anyway....