Delphi 3 can create reasonable smaller executables (*.EXE files) than Delphi 1/ 2.
Go to menu "Project | Options", select tab "Packages" and check the option "Build with runtime packages".
The packages listed in the text - by default:
vclx30;VCL30;vcldb30;vcldbx30;VclSmp30;inetdb30;inet30;Qrpt30;
teeui30;teedb30;tee30;dss30;IBEVNT30
will not be compiled into the EXE file. Instead you will have to ship a *.DCP file.
This makes (only) sense if you have several applications using the same controls = the same *.DCP file.