How Pixelation Actually Works
Pixelating an image means downscaling it to a much lower resolution, then scaling it back up with nearest-neighbor interpolation instead of smooth interpolation — nearest-neighbor upscaling simply repeats each low-resolution pixel as a solid block rather than blending between neighboring values, which is exactly what produces the characteristic sharp-edged "blocky" retro look, as opposed to a blurry, softly-scaled enlargement.
The block size directly controls how aggressive the effect looks: a larger block size means a more extreme downscale-then-upscale ratio, discarding more of the original detail and producing bigger, more visible "pixels" in the output — smaller block sizes preserve more of the original image's recognizable detail while still applying the stylistic effect.
This technique deliberately recreates the visual constraints of early low-resolution displays and game graphics — not by simulating a color palette limitation (a separate, different effect), but purely by simulating the spatial resolution limitation those systems actually had.