Was there an episode in Pokemon anime where all the wild Pokemon where miniature versions? On an island perhaps? Not gigantic robot versions or pink versions.
There is no episode where all the Pokemon on the island/place/etc. are tiny.
However, in the Sun and Moon anime, something like this occurs. The episode is called Dummy, you shrunk the kids! (SM083) and it features Faba and his new invention, which shrinks things. He accidentally shrinks Ash, Lillie, Sophocles, and Togedemaru with the shrinker. Pikachu's sneeze unshrunk them.