It was until the dawn of the 21st century that this was true, correlating closely with the rise of alternative time-telling mediums. This is when watches began to be worn less as an essential piece of equipment and more as a fashion piece, so critical evaluation of watch-to-wrist size began.
Whilst there is no golden wrist-to-watch ratio, often the watch’s lugs tell the full story. If they hang off the side of your wrist then it will almost always be too big, and if they barely make it there then it’ll probably be too small.
The difficulty with watches being fitted by their lugs is that watches are ordinarily sized by diameter of their face. You could have a 35mm watch with giant lugs that doesn’t fit you, or a 45mm without protruding lugs that fits perfectly.
With this taken into consideration, there is one rule that is more important than any other; that you feel comfortable that your watch fits well and suits. After all, on a day-to-day basis no one is going to evaluate your watch fit down to every last millimeter.