Learn Hardcore Arabic (Egyptian): البلدة صغيرة.

الـ is usually pronounced el- in Egyptian, not al-.
بلدة sounds like balda.
صغيرة is often pronounced sughayyara in everyday Egyptian speech, even though a more Standard-Arabic-style reading would be saghiira.
The gh sound here represents غ, a deep throaty sound.

So if you are learning Egyptian specifically, el-balda sughayyara is a good way to say it.

Why is there no word for is in the sentence?

Because Arabic often leaves out is/are in the present tense.

So البلدة صغيرة literally looks like the town small, but it means the town is small.

This is completely normal in both Standard Arabic and Egyptian Arabic.

If you wanted a past meaning, you would add a form of كان:

Why does small come after the town?