In relation to body size a baby's head is larger, because it holds the brain. When a baby is born, the brain is about a quarter of its final, adult, size. The brain developes at an increased pace during incubation, because once the baby is born it has to be able to functions properly. The head, obviosly, has to be big enough to hold the brain.
By the age of three years, the brain will have developed to 80% of its final or adult size.
when a baby born the size of the body is very small but the brain is larger organs. To maintain the proper body function the brain can not be too small , so it looks the brain is bigger than adults compare to adults. But soon when they grow ups it becomes normal. the body of a child grows at high rate than the brain. the brain usually doesn't grows at that speed. unless the baby is "mega mind" lol
It was meant to be bigger in diameter than the rest of the body since (normally) the head is the first one to pass through the birth canal. The spaces (fontanels) and the creases (sutures) in the skull have a feature of overlapping each other in order to adjust to the birth canal without damaging the brain. Once the head is out, the rest of the body can follow smoothly. =)
Their skulls aren't yet formed, they have tissue and un-joined bone that can make their heads weird shapes, also passing through the birth canal can deform the shape of a baby's head making it appear bigger/weird shapes.
Becuase their just born, the brain is the biggest orgn as of now, but give it some time. Their body has to catch up.