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jormis29
Since: Mar, 2012

Basically the way a single bullet or arrow takes up one inventory slot, but if you add whatever number of the same thing to that item, they "get smaller" until they hit wherever the cap is set for that item.
I think it's kind of related to hammerspace, but another element is that it's often accepted by the player as logically reasonable, like buying in bulk or something, that the item should be smaller in inventory if grouped than if alone.