When you expand something, you increase its size, leaving it expanded. For example, an expanded edition DVD has many more special features than the standard edition.
Conservatives like to say that they oppose an expanded role for government, but there isn't one Republican administration that hasn't increased the size of government. You might prefer the expanded edition of the diary, since it contains all the extra little tidbits they were afraid to include in the original, smaller version. An expanded retail zone will mean more stores with more options. On the other hand it will likely also mean an expanded zone of chaos and cars.