Handled fairly well in J. R. R. Tolkien's work, undoubtedly due to Tolkien's familiarity with real war.
While the orcs were massively inferior to humans, their fighting-ability did not diminish with increased numbers; and thus while Isildur's army was able to be overcome via superior numbers of orcs, Boromir was able to drive off any number of orcs, until Uglúk ordered about a hundred Uruk-hai to stick to shooting him with arrows, and so he died trying to save the hobbits. Still, he was able to kill more than 20 of them before that.
Played as straight as possible in Melkor/Morgoth himself. He was originally too powerful for even all the Valar together to defeat him, but by spreading his power through his slaves and the Earth itself, he was diminished so severely that Tulkas alone could best him.
Justified in one of The Dresden Files novels. Genre Savvy Harry notes the White Council, when they find powerful rituals, deliberately get the ritual published far and wide. The reason, as given by Harry, is "A ritual is like a supernatural vending machine. If many people are drawing from it, the ritual gives each person a tiny bit. But if only a few people draw from it, it's very powerful."
"The Code was quite clear. One brave man against seven ... won. They knew it was true. In the past, they'd all relied on it. The higher the odds, the greater the victory. That was the Code."
Also played with a lot in Interesting Times (with the Silver Horde on the opposite side of the equation), where Rincewind thinks "If it was seven against seventy everyone would know who would lose. Just because it's seven against seven hundred thousand, everyone's not so sure." Cohen, meanwhile, comes up with a logical reason why being outnumbered actually favours them (it boils down to "Always choose a bigger enemy, 'cause it makes him easier to hit"). (Although in the end, they're saved by an army of MagitekMecha-Mooks.)
Cohen also offers a rather original justification. It is pointed out to him that even if he and his horde manage to kill a couple thousand soldiers, they will be tired and the enemy will have fresh troops. Cohen explains that the soldiers will be tired as well because by that point they will be running uphill.
And then there's Thief of Time's Rule One: "Do not act incautiously when confronting little bald wrinkly smiling men". Lu-Tze is even momentarily surprised at one point that a group of bandits would try to mug him. Paraphrasing: "You're a group of armed thugs attacking a lone, wizened old man who's smiling, and don't run for your lives?!"
Their guides, who DO know Rule One, were already hauling ass.
Lu-Tze plays this all over the map. Early on, his opponents know Rule One and voluntarily stand down. Later, when faced with enemies who don't know Rule One, he cheats. Eventually, when he's in a situation when he can't cheat, he proves that he personally really can provide a practical demonstration of why Rule One is a good rule to live by.
Guards! Guards! is dedicated to the men who make this trope possible. And completely averts it when Vimes is arrested. The guards look at him suspiciously, ask if he's going to pull a one-man can of whoopass out on them, and when he admits, "Wouldn't know where to start," they take him into custody without a fight while complimenting him for being sporting about it. Quite in contrast to hislater persona, but there you go. Later on, though, he was: a) not an alcoholic any more; b) Commander of the Watch, instead of Captain of the Night Watch; c) a Duke; and d) totally sure of himself because of a, b, and c. When he was arrested he was still a hardarse, but much less self-assured.
The Nac Mac Feegle love being outnumbered. It means they don't have to watch where they swing.
In the Sword of Truth series, Richard gains the ability to face off against innumerable foes by being forced into a battle to the death with thirty highly trained warriors. The whole purpose of the fight was to force him to use the Sword of Truth in a manner that communicated its past wielders' experience to him. It's a skill that saves his life many times on in the series.
Matthew Stover's Shatterpoint, a Star WarsEU novel, has this used quite literally. Five or six Force-users shared from the same pool of energy, since they were bonded to their leader Kar Vastor. As they were killed off in the climactic battle, their shares of the power flowed back into the communal pool, and the last one standing, Vastor himself, ended up enormously superpowered. It didn't help.
In the Chronicles of Prydain novels by Lloyd Alexander, the Huntsmen of Annuvin (Annuvin is the area the huntsmen come from, their leader is the Big Bad, Arawn) explicitly have this as their special power, each individual member of a group growing stronger as their numbers are decreased. The power is so feared that the usual answer is to run, and curse oneself if forced to kill one; as this made your chances of survival less. To the point where one character says that he's more afraid of them as he is the unkillable Cauldron-born.
Inverted in the Chronicles of Thomas Covenant where ur-viles and related creatures have magic to combine their individual power into one, making their danger level scale with the number of them in a group.
Deconstructed the occasion it most obviously happens in Warhammer 40,000: Gaunt's Ghosts, where the tacticians going over the reports have the battle in question written out of the archives, because they simply couldn't comprehend how so few could beat so many. Other times, the Ghosts work in coordination with other Imperial Guard units and rarely take out superior numbers on their own. Played straight with the Blood Pact, though, as they die en masse with little effect when they attack in large groups, but small kill-teams such as the one sent to Balhaut in Blood Pact appear much more effective.
Although the effectiveness of the Blood Pact team sent to Balhaut can be attributed to that platoon essentially being Urlock Gaur's equivalent to the Gereon Team, at least in the sense they were the cream of the Pact as the Ghost's are in the Guard.
Sandy Mitchell's Ciaphas Cain, Hero of the Imperium, has an inverse example in Caves of Ice: The stormtrooper squad has literally grown up together in one of the Imperium's orphanages. They've been trained to fight together up to the point where the intuitive rapport of the squad borders on telepathy. The downside is that they don't play too well with others and rotating in new soldiers for casualties makes no sense as they'd remain outsiders to the team. Thus, with more and more members dying, the squad becomes irrevocably weaker. The team accompanying Cain is almost at the point where they'll fall below the efficiency of a normal squad. It's kind of a moot point - the Necrons kill them all.
Indirectly used in The Chronicles of Amber by Roger Zelazny during the war with the Courts of Chaos. There are, at max, only 15 Princes and Princesses of Amber, versus countless hordes of nobles from the Courts that are not only the same age or older than the Amberites, but theoretically almost as powerful. Not only do the Courts get thrashed defending their home turf, but they really only managed to kill one Amberite during the entire war - and the evidence actually points to the fact that he actually died of causes other than his wounds. All other Amberite deaths were actually caused by infighting. Oh, and this also doesn't include the fact that the two most powerful members of Amber, Oberon and Dworkin, didn't participate in the battle at all.
This defeat causes an underground semi-religion venerating individual Amberites to spring up at the Courts after the war.
Likely due, at least in part, to a literal conservation of power effect: on some level the forces of Amber and the Courts are acting as proxies for, and drawing their magical powers from, the Pattern and the Logrus, which are generally balanced in strength.
In the Deep Space Nine novelizations, when the Dominion and Cardassians are attacking the station, Dukat notes that Sisko works much better when he has fewer ships. It certainly seems to be true, as the station and two ships account for dozens of attackers during the battle.
Deconstructed in the first novel of the X-Wing Series, where Rogue Squadron is attacked by three squadrons of TIE fighters. They don't take a single casualty while only two TIEs get away, and Wedge thinks later about how combat statistics have shown that the more fighters are in a battle, the lower each pilot's kill count is. The Imperials also had to watch their fire, as while the Rogues had shields, TIEs don't, and therefore they had to be careful picking their targets, something the Rogues weren't limited by.
From The Bible: Leviticus 26:7-8 says: And ye shall chase your enemies, and they shall fall before you by the sword. And five of you shall chase an hundred, and an hundred of you shall put ten thousand to flight: and your enemies shall fall before you by the sword. Making this Older Than Dirt.