Sounds like a dollhouse quilt. I've worked with pieces that started at 3/4" sq and ended at 1/4" when I did an Attic Windows quilt for my dollhouse, but I hand pieced them, I used a ruler and traced the seamlines onto the fabric so I had a seam line to follow, at that size you have to be pretty exact. I trimmed the seams after stitching them. Be careful what you use for a batt if you use one, because it can make it chunky. Either don't use any or just a thin layer of flannel or something similar.
Some of the people on here do miniature quilts and I'm sure they'll give you some expert advice. Mine were strictly amateur.