Focusing on size-selected gold clusters consisting of up to 20 atoms, that is, in the size regime where properties cannot be obtained from those of the bulk material through scaling considerations, we discuss the current state of understanding pertaining to various factors that control the reactivity and catalytic activity of such nanostructures, using the CO oxidation reaction catalyzed by the gold nanoclusters adsorbed on MgO as a paradigm. These factors include the role of the metal-oxide support and its defects, the charge state of the cluster, structural fluxionality of the clusters, electronic size effects, the effect of an underlying metal support on the dimensionality, charging and chemical reactivity of gold nanoclusters adsorbed on the metal-supported metal-oxide, and the promotional effect of water. We show that through joined experimental and first-principles quantum mechanical calculations and simulations, a detailed picture of the reaction mechanism emerges.