(EDIT: seems you edited out the statement saying you referenced something)

 

Are you sure you actually pixeled this manually?  The readability is essentially non-existent (I can guess that there's grass, water, and mountains from the shape, but that's under a 4x magnification).  The color count is very high -- 255 colors, says the PJ imagespecs tool (probably more than that, though -- I'm assuming that tool cuts off at 255 colors).   I'd say this is partially because you saved as a jpg.

 

The other partial reason is because I suspect this is simply a scaled-down version of whatever image you said you were trying to make a pixel art version of.

 

If not, then excuse my claim.

 

As for critique, I'm heading out of work right now so I don't have time to pitch in ideas, but I would say not to save as jpgs, work on readability (the clarity of the image), make sure to use a lot less colors (perhaps try sticking to 8 at first and see how that works out?), and don't use dirty tools (tools that don't place pixels like the 1-px wide pen tools do).

 

I'd also say that 40x40 is a very small size to fit in what you're drawing, if you want to make it readable.  It's a pretty detailed scene for such a small space.