[Slydria]

Erm, sorry for being picky but I meant I was looking for a logical reason specifically like "I am short because of my race, I am short because I was born with a defect, I am short because I've been cursed."

I don't think the process of becoming a Dullahan itself would shrink you. If you wanted to use that sort of hook for this, I'd suggest something like separating the two things as different circumstances (as in there's the event that caused them to shrink and then the event that resulted in them becoming a Dullahan.)

For example, let's say sometime before becoming a Dullahan, they encountered a witch in a dive bar. Your character acts in his typical boastful and proud manner which unknownst to them angers the witch, after a night of drinks and putting up with it, they finally have enough and decide to shrink you with a curse as a form of punishment.

Then later on in life, they gain a reputation as a short knight much to their dismay, they tragically perish in a fierce battle but due to an unrelenting desire (like say a deep desire to prove that despite their new height, they are worthy of being a knight), their spirit clings to their tiny armor.

Obviously that's just an example but I hope you understand what I mean.