Why is the panda bear referred to as the "giant panda" was there once a smaller size that is now extinct?

There are fossil "giant" pandas, but they're generally smaller than the living giant panda.

They're called "giant" to distinguish them from the lesser panda, which looks a little like a raccoon that got dunked in bleach. Giant and lesser pandas were originally thought to be close relatives; this is no longer the case.

(The lesser panda is also called the red panda.)

have a look at:

http://www.sciencedaily.com/releases/2007/06/07061...

It is called the Giant Panda to distinguish it from the Lesser Panda also called the red panda. They have similar markings, especially around the eyes and at one time were thought to share these similarities due to being related. Through DNA analysis, it is now thought that they are not related (Giant pandas related to bears and the lesser panda to racoons) and these similar markings and morphologies are due to convergent evolution.

All animals alive to day have extinct relatives, even humans.

Yes, there are four smaller species that are extinct. Also, I think that "Giant" was to separate it from the Red Panda, which used to be considered related, but now isn't. The Red Panda is kept with the raccoons and the Giant Panda is now considered a bear.

there is a lesser panda that looks nothing like the giant panda