Smallpox has a lot of different names, but the name infinite city sprawl (ICS) probably describes it best: in essence you build lots of small cities that never go over the unhappy limit. This will give you a huge production potential and makes the cities easy to manage, because you will get one extra city tile worker per new city and you never need to build improvements, just attack units.
The opposite is Largepox, where you build well-developed cities with lots of improvements. Smallpox was at its height at Freeciv 1.14; many rule changes in 2.0 and 2.1 were made to try to reduce smallpox's potential.
Some reasons why smallpox is attractive (i.e. reasons why having more small cities is better than having fewer large cities):
- every additional city gives a free tile worker
- every additional city gives some "naturally content" workers
- every additional city supports three military units for free (Monarchy/Communism only)
- small cities grow quicker than big cities (the foodbox is smaller)
Other names 
Edit
- ICS: infinite city sprawl.