USB Drive Size Lost After Formatting on OS X El Capitan
By default, Macs format all drives with the GUID partition scheme (GPT).  A particular feature of GPT is the EFI system partition, which on a Mac defaults to 200 MB in size.  The EFI partition is also FAT32.

Windows supports GPT just fine, but it does not support multiple partitions on a USB flash drive.  Windows will only see the first partition, which is the 200MB EFI partition. It is the only operating system that has this limitation.

To reformat this drive, you will need to select the Master Boot Record (MBR) partitioning scheme in Disk Utility in order for Windows to use it.  You must also ensure that you create only a single partition that spans the whole drive.