A small, mountainous island with no resources and a low population has a very high difficulty score - succeed on it and you will truly have proven your mastery of Tropico. There are some idiosyncracies with the level of difficulty, however. For example, it seems easier to start out with a large, robust population - but those quickly become unmanageable. In fact, in the long run population problems are the main concern of the game. As your population grows, you have more people to care after, and discontent among all the factions grows.
Income gaps widen as the population grows, displeasing communists.
It becomes difficult to find space for various luxury buildings, displeasing the capitalists. Both sides become unhappy as unemployment and crime rates rise in tandem. The Intellectuals demand more and more freedoms, education and liberty for the people, while the religious demand restrictions and more churches. If you already have a large military force, it is difficult to cut down without creating dissenters. If you do not have a large force and your island population is displeased, then rebels can take the palace down.