Since power is the *rate* of delivering work, smaller engines with less torque can still make a lot of power by working at high speeds.

Another, even simpler way to think about it is that an engine is a device for converting gasoline into kinetic energy. The more gas you can consume, the more energy you're adding and the faster you'll go. So, the only question is how to make more gas get eaten. You can go for more engine displacement, more cylinders, injecting the gas more often (rotary, 2-stroke, higher RPM), more compression, more air to support the combustion of more gas (turbo, supercharger) and so forth.

Of course, that would say that a high-revving Honda S2000 with the 2.0 liter 4 cylinder engine and a lower revving Ford Mustang with the 4-odd liter V8 are roughly equivalent, modulo gearing and all that extra weight for the big V8 block, or the additional materials cost of keeping the Honda engine carefully balanced and machined so it doesn't self-destruct from the high piston velocities.

Hmm....