Old books have interesting information about target size.
In the book "Introduction to Shurikenjustu" (手裏剣術入門) Someya Sensei describes his testing to dispel many theories of shurikenjutsu. He lists a few different target diameters used for his testing.
12cm - width of the eyes
15cm - width of the face
24cm - height of the face from eyebrows to the throat
In "Introduction to Kakushibukijutsu" (隠し武器術入門) there is a section on the omote waza of shuriken throwing which mentions a 12cm diameter circle. It also says that Shodan level is achieved by reliably shooting 4 out of 5 inside this circles from a distance of 2 ken (3.6m). That's a high level of skill and above what is tested for in MSR today for Shodan.
The MSR target size became standardised to a 20cm diameter circle to represent the size of the face, generally the height of the top of the brow to the bottom of the chin.
Left side of the attached photo is the 24cm circle on paper over 1/8th piece of tatami mat from "Introduction to Shurikenjutsu". Right side is the 12cm circle drawn on 1/8th piece of tatami from "Introduction to Kakushibukijutsu".