Concept:
In a tilted aerial photograph, the camera axis is inclined from the vertical, causing the photo scale to vary continuously across the image.
Step 1: Understand the effect of tilt.
The ground on the side nearer to the camera appears enlarged, while the farther side appears reduced.
Step 2: Identify the scale variation.
Consequently,
\[
\boxed{
\text{Scale is smaller on the upper side and larger on the lower side.}
}
\]
Therefore, the correct option is
\[
\boxed{(C).}
\]