The story was about the human beings becoming too "static" in evolutionary terms. A scientist engineers much smaller human beings, that in their infancy are "about an inch high" (IIRC). This is, he says, to have the best ratio between the nervous system and the body they have to control.
This new race proves to be extremely smart, telepathic, and of course there's a military bad guy that opposes the project. There are also three other bad guys, which are the typical not-so-smart-bad-guys, that in the very end
get caught by the small humans and have their heads cut off.
Also at the end, something that I consider very silly is found out:
the small humans have formed their own civilization, which is under control of a giant brain that they have built.
Any suggestion as to the title?
EDIT: Adding details to answer the comment, I've read it in the early 90s, but I think it was from the 80s. It was a full novel, and I think it was aimed at adults (but I was only 14 at the time).