First, you can separate areas of your yard, either with different elevations or with different flooring materials. For instance, even a small deck that contains several steps leading to a higher level breaks up the yard and can give the illusion that the space is bigger than it really is. You can also achieve the same effect by using different materials for the flooring, perhaps a small wood platform under your cedar Adirondack chairs and a stone pad under your grill. You can even combine both these methods, if you wish.
Keep color schemes and decorative accents simple and spare to encourage an open feeling. Use just a few well-placed planters instead of numerous flower beds and plants. "Less is more" definitely applies when your space is limited.
Another way you can encourage an open feeling is to avoid walls or overhead coverings. Leaving your back yard open to the sky and surrounding area will make it look bigger than if you enclose the area. If you need shade, cover only a portion of the yard, probably wherever you plan to place your cedar Adirondack chairs. Then leave the rest of the yard open.
Place your cedar Adirondack chairs wherever they will enjoy a view of the longest expanse of your lawn. If you have a wide house, the Adirondack chairs may do well next to the house. But if your lawn runs deeper the other way, you might consider placing the cedar Adirondack chairs at a right angle to the house. Arranging the chairs to view the long angle, you once again create the illusion of more space than you actually may have.
Look for space-saving substitutions of fixtures you'd like to include. For instance, if you've always wanted a fountain in your back yard but have little free space for it, check out small fountains that fit on a table top or shelf. They produce the same peaceful trickling sounds, and many include small rocks you can arrange to suit your tastes or multi-level construction so you get more visual appeal out of the space. Or if you need outdoor storage, consider a storage bench that also provides extra seating.
Above all, limit your furnishings and accessories. Obviously, you can't have everything when you're dealing with a small back yard. But some classy cedar Adirondack chairs and few carefully chosen decorative items can form a relaxing and organized design. Finally, make sure to actually leave some empty space in your yard. It's the simplest way of giving your lawn an open feeling, yet it can be easy to forget when you see all the choices of furniture and interesting outdoor accessories.