Diagnosing IUGR really depends on a few factors. It depends on when you began seeing your midwife- the earlier into the pregnancy the more likely a good fundal height growth assessment can be made. It also depends on how certain you were of your dates, this helps lower the leeway for fundal height variations. Then your own anatomy/build plays a bit of a role in assessing "normal", because it will vary from mother to mother considerably. There may be other factors nutritionally and livestyle wise that cause an allowance for a smaller measurement (usually something like smoking, high caffiene intake, poor nutrition habits, or such). The midwife also has to take into account the volume of amniotic fluid, if there is a lot of fluid it can make gauging size a bit more challangeing.
There are two types of small size baby also, and both tend to get lumped into the same catagory medically unless premature birth was an issue. Some babies are "Small (or light) for Gestational Age", this means that the baby's growth rate was normal in regards to meeting expected increases in size, and when born the body grew symetrically and in correct proportion, the baby was healthy, but small. This is usually just a genetic variation. Or there is the actual "Intrauterine Growth Retardation" where the growth rates did not meet the usual rates of growth consistently when measured, and the baby actually fails to achieve the size that was expected, often (not always) the condition of the placenta at birth can reveal reduced performance/health.
I know one mom who is extremely anemic, she has never been counseled by her doctor to rectify this problem, but it is probably because of a racial and socialeconomic connection. Anyway, her babies are all SGA at 5lb, they are normal in all other regards, but tiny at birth- they look like dolls. Health wise they are always well enough to take home right away. The anemia causes her to have a small placenta, and the reduced blood flow feeding the fetus from the beginning causes a small baby from the beginning. If a mother has a relatively normal size placenta at the beginning, the baby will begin its growth at a normal size and rate, but if later the health of the placenta or maternal circulation deteriorates, the baby will begin growing at a slower/impaired rate, resulting in IUGR.
Other than ensuring good quality nutrition intake and hydration, there is not alot that can be done to reverse IUGR. If a mom has hypertension or diabetes mellitus, that can effect the health of the placenta/circulation also.
You can read a fair bit about this in Holistic Midwifery, pp.400, 409-413, 990-994. This book is one of the main texts in midiwfery coursework.
Many midwives do not order routine Ultrasound, but if they suspect something may be amiss, they will discuss the need for an ultrasound with their client. If there are no obvious indicators, as in SGA babies, then it is less likely that they will call for an ultrasound. Ultrasounds are standard in the medical model of care, and many mothers will have between 1 and 3 before delivery- even then it really depends on when they are done as to accuracy, and who is doing the reading as to how reliable the result is- I'm sure that there are many moms on this board who have been told that their baby would be really small, or really huge, or have some condition, that at birth did not occur.
I'm sure that other midwives here can (and will) add to this from their knowledge and experience.
It is hard to say with any birth, in retrospect and as someone who wasn't there and has no access to your charts, what the signs and causes of a particular experience may have been.
Since you are not comfortable with the prenatal care you recieved, you may want to bring this to your midwife's attention, either meeting to discuss the experience, or writing a letter?
(I am so very sorry for your loss.
The Lord bless you,