Learn Dutch: Er staat een autootje naast het villaatje. - There is a little car next to the little villa.

When a noun ends in a single vowel that has a long sound (like the 'o' in auto or the 'a' in villa), simply adding -tje would trap that vowel in a closed syllable, making it sound short (like "au-tot-je"). To keep the long vowel pronunciation, you must double the vowel before adding the diminutive ending.

If the original words are de auto and de villa, why does the sentence use het villaatje?

No matter what gender the original noun is, all diminutives in Dutch automatically become neuter words. This means they will always take the definite article het instead of de.

Why does the sentence use staat instead of is for "there is"?

Dutch rarely uses zijn (to be) to describe where a physical object is located. Instead, it uses position verbs like staan (to stand), liggen (to lie), or zitten (to sit). Because a car rests upright on its wheels, it "stands": Er staat een autootje.

Could I just say Een autootje staat naast het villaatje?

Technically yes, but it sounds unnatural. When introducing a new, non-specific subject into a sentence (indicated by een), Dutch strongly prefers using er as a placeholder at the start of the sentence. This works exactly like saying "There is a..." in English.