Think of catchment response as controlled by whichever flow phase eats up most of the travel time to the outlet.
In a small catchment, the outlet is close to every part of the land, so rain has to travel mostly as sheet flow across fields and slopes before it even reaches a channel. Since this overland leg dominates, whatever is happening on the land surface, crop cover, tillage, soil compaction, and however intense the rain falls, both leave a strong fingerprint on the peak discharge. That is Statement (I), and it lines up with why methods like the Rational Method work well for small basins.
Push the same logic to a large catchment and the balance flips. Water now travels long distances inside defined channels, where storage and channel routing stretch out and blend the inflow from many smaller sub-areas. A short spell of intense rain in one corner or a patch of unusual land use gets diluted into the overall channel response, so their individual influence on the peak flood weakens. That is exactly Statement (II).
Both descriptions of how catchment size shifts the dominant flow phase turn out to be accurate.
\[\boxed{\text{Both Statement (I) and Statement (II) are correct}}\]