Williams, 24, was withdrawn by his corner at the start of the 10th round because of a severely cut eye.
The Welshman felt the injury, which required plastic surgery, was a result of a “blatant” Smith headbutt.
Had the clash of heads been recognised, Williams was on course to win.
He was up on all three of the fight judges’ scorecards.
Promoter Warren said Williams’ performance exceeded his expectations and says he wants the pair to do it all again.