can a gnome catch lycanthropy from a medium or large were-beast? what does "within one size category" mean?
Possibly.
It means no more than one size category larger or smaller.
For example, a wolf is a medium creature. An ogre (large size) could become a werewolf, because that is within one size category of medium. That same ogre werewolf could afflict a gnome, because a gnome is within one size category of medium, too.