In the UK the rules on sheds and structures are controlled by the local council. Often they set a maximum size, but I suspect they aren't measured unless you piss off someone enough to complain.
There was a movement in the late 1890s-1930s where building societies would buy strips of land to allow the working man to take out a loan to buy and build on a plot of land, with enough space to grow and keep livestock. I wish I knew what they were called. Basically they were allotments with houses.
In the netherlands Tuinhuisen are a thing, and they put a lot of effort into making them look nice and be livable.
That is the intention in Scandinavia as well, and how most people use them. Although it has generally always been acceptable to have a bed and spend the night there. However some people have upgraded their 'shed' to (ab)use them as more permanent living spaces, even if it is generally frowned upon.