Enabled by their size, small machine tools manufacturing small workpieces allow for a leap of improvements and therefore overcome current limitations in micro manufacturing. Nevertheless, to achieve those benefits the classically engineering mindset and machine tool design have to be overcome. Those ideas, the reasoning behind them and the corresponding conditions are laid down in the so called theory of small machine tools. The generic theory includes a framework approach to help in the process of machine development resulting in a new kind of miniaturized and function integrated machine tools. This conceptual contribution describes the idea, aspects, objectives and methodology pursued by the theory of small machine tools.