If I may add to essexboy's remarks ... a so-called decompression bomb is (or at least used to be) typically compressed in several sequential stages, each stage using a different compression method to allow further compression. Therefore the end result could be as much as several orders of magnitude smaller than the original file, as compared with, e.g., a common self-extracting exe, which might be a few dozen times smaller than its contents.
While we haven't seen much news about such "bombs" lately, we used to get lots of complaints about the worst-case scenario when trying to re-expand one, where in some cases the user would run out of disk space with one or more stages of decompression still to go.