And if you want to get real technical, displacement is the bore * stroke * # of cylinders. Bore is the inside diameter of the cylinder, and stroke is the distance that the piston travels during one revolution. A larger engine will produce more torque for a given RPM, but there are ways to get more power out of a small normally asperated engine. These generally involve winding them to a real high RPM.
Indy cars manage 800hp out of a 1.9L engine. Of course, they're turbocharged and running on pure ethenol. And turning at around 14,000 rpm.
Interestingly, horsepower is a fabricated number that Watt came up with based on how much coal he thought a mine Mule could haul in a givin time- 33,000 lb-ft/minute. An interesting site for questions like this is How Stuff Works-
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