There is no unambiguous answer to this.
You're asking after the common technique, which to me seems to be beside the real intent of your question: your choice in the size of reference images depends completely on
- what result you are aiming for;
- how you work, and;
- what you're comfortable with.
For clarity's sake, let's limit 'reference image' to only mean the image one is directly working from, and not any intermediary image (like the original picture that one might scale up and print).
First of all: no, reference images certainly don't have to be of the same size as your final drawing. There is no single way to go about this, as every artist has a different workflow and goal in mind.
Reference images can be of any size and any definition, but - naturally - larger and more detailed references will allow for more precision and detail in your final drawing.
Here are a few things you can take into consideration before deciding on the right reference image size:
Level of detail
The amount of visible detail in a reference image is important for the amount of detail you want to convey in your artwork (depending, of course, on the size of the artwork (#2)).
This is related to the original image size and (in case of digital pictures) its resolution: when using physical references, blowing up the images for printing might not always give you the additional detail you need, as they might not have contained it in the first place.
Size of your artwork
As already mentioned in your post, this will have a huge influence on what size of reference material you choose. The larger the drawing (or painting, or sculpture), the more detail you'll likely want (potential exceptions being style (#4) and composition (#5)).
For some techniques you would need the reference to have the exact same size as that of your drawing ('pouncing' cartoon technique, transfer techniques (e.g. carbon paper)), whereas for others - you already mentioned the grid method, with which you can up- and downscale nearly anything - don't limit your image size at all (in which case you're only limited by level of detail (#1)).
This is quite important, but easily overlooked. One artistic style needs far less definition than the other: for example, photorealism requires a significant amount of detail, while abstraction won't necessarily. Using thick brush strokes can easily imply detail, without necessitating it. At times yours truly has even incorporated the (accidental or intentional) compression artifacts present in images in my paintings (for conceptual reasons, admittedly, but still).
To put down the composition, both the structural as well as the colour composition, working from small images can be beneficial, as it is easy to block in your artwork without being distracted by details. This of course also has to do with the stage of your work (#6), and usually is preferred at the beginning rather than the later stages of the process.
Stage of the work
You can also start working from a small image and work your way up to larger versions as you add detail, or even return to smaller ones as you finish the composition and want to pay more attention to the colour composition (#5).
For working horizontally, with a small to medium-sized drawing lying on a surface in front of you, it still might be the easiest to work from a 1:1 reference image, because it will be easier to see how both relate, and you get a much clearer idea of how much detail will be present in the final drawing.
I myself usually don't care that much about the image size. Whenever I do print references, I print them on A4, independent of the artwork size, sometimes tweaking their contrast a little to get more easily discernible information from it. Admittedly, I mostly work from images shot with a high quality 16MP camera, or from high-resolution renders, but have worked from magazine snippets as well for significantly larger paintings.