Among transition metal oxides, manganites have attracted significant attention because of colossal magnetoresistance (CMR)—a magnetic field-induced metal–insulator transition close to the Curie temperature. CMR is closely related to the ferromagnetic (FM) metallic phase which strongly competes with the antiferromagnetic (AFM) charge ordered (CO) phase, where conducting electrons localize and create a long range order giving rise to insulator-like behavior. One of the major open questions in manganites is the exact origin of this insulating behavior. Here we report a dc resistivity and magnetization study on manganite La1−xCaxMnO3 ceramic samples with different grain size, at the very boundary between CO/AFM insulating and FM metallic phases x=0.5. Clear signatures of variable range hopping (VRH) are discerned in resistivity, implying the disorder-induced (Anderson) localization of conducting electrons. A significant increase of disorder associated with the reduction in grain size, however, pushes the system in the opposite direction from the Anderson localization scenario, resulting in a drastic decrease of resistivity, collapse of the VRH, suppression of the CO/AFM phase and growth of an FM contribution. These contradictory results are interpreted within the standard core-shell model and recent theories of Anderson localization of interacting particles.