Cable size is chosen on three criteria: the use of the circuit, the rating of the protection and the length.
The use
In a dwelling, lighting is wired in 1.5 mm² at minimum and sockets in 2.5 mm². Large appliances have their own circuit, often in 2.5 mm², and the single-phase hob in 6 mm².
The rating
The breaker protects the cable: its rating cannot exceed what the cable size can carry. A 20 A breaker on 1.5 mm² is not permitted.
The length
The longer the cable, the more the voltage drops. The usual target is 3 % at most for lighting and 5 % for other uses. On a long circuit, move up to the next size.
Example: 20 m of 2.5 mm² carrying 16 A single-phase gives about 2.4 % drop.