There are command-line options for format that tell it to format the disk at the correct capacity.

format a: /f:

where is the commonly referred to size. Valid options are 160 or 180 for single-sided double-density 5.25" drives, 320 or 360 for double-sided double-density 5.25" drives, 720 for double-density 3.5" drives, 1.2 for high density 5.25" drives, 1.44 for high density 3.5" drives, and 2.88 for extra-high density 3.5" drives. (3.5" 'mode 3' drives can use 1.2 as well.)

 

Also, using /8 is a shortcut telling the system to format a disk to 360 K in a 1.2 MB drive. (i.e. "format a: /8")