From my experience, the sooner you get it into dirt, the better. I only use the toothpick method to see that it is actually germinating. Once I see a root coming down and a cotyledon coming up, I get it into a pot with some dirt. It sounds like your seedling is ready to be potted.
Avocados can get huge, but my climate is too cold for them, so I have to keep them in pots. However, I have had small plants (<8' tall) that bore a lot of fruit. If you need more info, check out
this guide from the University of California.