Learn German: Wir essen im Wohnzimmer. - We eat in the living room.

im is a contraction of in dem. In German, you almost always combine the preposition in and the dative article dem into im so it flows better. Because Wohnzimmer is a neuter noun (das Wohnzimmer), it requires the article dem in this grammatical case.

Why do we need the dative article dem here instead of the accusative das?

The word in is a two-way preposition. It uses the dative case when you are describing a fixed location (answering the question "where at?"). Since you are already inside the living room eating, you use the dative dem. If you were moving from another room into the living room (answering "to where?"), you would use the accusative case: Wir gehen ins Wohnzimmer.

How do you know the gender of a compound word like Wohnzimmer?

Wohnzimmer is built from the verb wohnen (to live/reside) and the noun das Zimmer (the room). German compound nouns always take their gender from the very last word in the chain. Because it is das Zimmer, the combined word is automatically das Wohnzimmer.