There are several possible limits that might be set on your server that might cause the conversion of larger video to fail.

Check the Server analysis tab of the iZAP Videos plugin settings page. The relevant php variables and their current values should be listed there.

The php variable memory_limit should be at least as large as the size of the video you want to be converted. Also post_max_size must be at least as large. It might also be necessary to increase max_input_time and/or max_execution_time to allow for the upload and the video conversion to finish. The value of upload_max_filesize sets the maximum allowed filesize for any file upload whereas the plugin setting of the iZAP Videos plugin on its Settings tab can restict the filesize of uploaded video files to smaller values than upload_max_filesize but never to a larger value than upload_max_filesize.

The php variables have to be set either in the .htaccess file of Elgg or in the php.ini config of the server. Any changes you make should show in the values displayed on the Server Analysis tab. If the values differ from the values you have set the file you made the changes is either not the right place to make the changes (in some server configurations the php values set in .htacces files are ignored) or you might have set the wrong values.

Try increasing the php values that are likely too small. Of course, you can't increase them without limits (e.g. max. RAM of the server is definitely a limit you can't exceed with memory_limit).