Learn Hardcore German: Die Kleinen schlafen schon, die Großen sitzen noch am Lagerfeuer. - The little ones are already asleep, the big ones are still sitting by the campfire.

Die Kleinen literally means “the small ones / the little ones” and usually refers to small children.
Kleinen is originally an adjective (klein = small), but here it is used as a noun (“the small ones”), which in German is called a substantiviertes Adjektiv (adjective turned into a noun). All nouns in German are capitalized, so Kleinen is written with a capital K.

How do we know that die Kleinen is plural and not “the small (feminine) one”?

The article die can mean either feminine singular or plural of any gender, so by itself it’s ambiguous.
We know die Kleinen is plural because the verb is schlafen, which is the 3rd person plural form (“they sleep/are sleeping”), not schläft (he/she/it sleeps).
Context also helps: talking about “little ones” and “big ones” around a campfire practically always means multiple children or people.

Why does it say die Kleinen and not die kleine Kinder?

Die kleinen Kinder would mean “the small children” and explicitly uses the noun Kinder.
Die Kleinen leaves out the noun and lets the adjective stand as a noun: “the little ones.”
This sounds more informal and familiar, and it’s very natural when speaking about groups like children vs. adults (e.g. die Kleinen und die Großen).

Why is the ending -en used in Kleinen and Großen here?

With a definite article (der, die, das, die) and a plural noun/adjectival noun in the nominative, the ending is -en:

die kleinen Kinder
die Kleinen
die großen Leute
die Großen

So die Kleinen and die Großen are nominative plural with the definite article; the weak declension pattern gives the ending -en.

What exactly does die Großen refer to here?

Literally, die Großen means “the big ones / the tall ones / the grown(-up) ones.”
In this context, it will almost always mean older children or adults, contrasted with die Kleinen (the little kids).
Which one is meant depends on the situation: at a kids’ camp it may be older kids; in a family context it may clearly mean the parents/adults.

What is the nuance of schon in Die Kleinen schlafen schon?

Schon most directly corresponds to “already” here: “The little ones are already sleeping.”
But in German, schon often also carries a slight contrast or expectation: they are sleeping earlier than or before someone else or something else happens.
Here, the contrast is explicitly with die Großen who are noch sitting at the campfire.

What does noch mean in die Großen sitzen noch am Lagerfeuer, and how is it different from English “still”?

Noch here means “still”: “the big ones are still sitting at the campfire.”
It implies that an activity is continuing and has not ended yet.
This use of noch is very common and usually corresponds directly to English “still” in positive sentences:

Er wartet noch. – “He is still waiting.”

Is there a special relationship between schon and noch in this sentence?

Yes. The pairing schon … noch … is a very typical German way to show a contrast in timing or state:

Die Kleinen schlafen schon, die Großen sitzen noch am Lagerfeuer.

This can be felt as: “The little ones are already at this later stage (asleep), while the big ones are still at the earlier stage (sitting at the fire).”
German often uses schon and noch together like this to emphasize different points on a timeline.

Could we also say Die Kleinen schlafen schon, und die Großen sitzen noch am Lagerfeuer? Why is there only a comma?

Yes, you can absolutely say:
Die Kleinen schlafen schon, und die Großen sitzen noch am Lagerfeuer.

In German, it is perfectly correct to connect two main clauses with just a comma, without und or another conjunction.
Adding und is possible and may sound a bit more explicit or narrative, but the version with only the comma is very normal and not considered incorrect.

What case are die Kleinen and die Großen in?

Both die Kleinen and die Großen are in the nominative plural.
Each one is the subject of its clause:

Die Kleinen schlafen schon. → subject = die Kleinen
Die Großen sitzen noch am Lagerfeuer. → subject = die Großen

Why is it am Lagerfeuer and not im Lagerfeuer or something else?

Am is the contraction of an + dem and takes the dative: an dem Lagerfeuer → am Lagerfeuer.
With places like a fire, table, window, etc., an often means “at / by / next to”:

am Tisch sitzen – sit at the table
am Fenster stehen – stand at the window
am Lagerfeuer sitzen – sit at the campfire

Im Lagerfeuer (in + dem) would literally mean “in the campfire,” which would be physically inside the fire and nonsense in this context.

Why do we use Lagerfeuer as one word, and what gender does it have?

German commonly forms compound nouns by simply sticking words together.
Lagerfeuer = Lager (camp) + Feuer (fire) → “campfire.”
The gender of a compound is always the gender of the last element, so it is das Feuer → das Lagerfeuer (neuter).

Why do we say sitzen instead of sind in die Großen sitzen noch am Lagerfeuer?

Sitzen describes how they are there – their posture: they are sitting at the campfire.
If you say Die Großen sind noch am Lagerfeuer, that only means they are still at the campfire, without specifying whether they are sitting, standing, etc.
German often prefers a more specific verb like sitzen, stehen, or liegen when the position is relevant.

Where in the sentence can schon and noch go? Is the word order fixed?

The basic pattern with a simple subject + verb is:

Die Kleinen schlafen schon.
Die Großen sitzen noch am Lagerfeuer.

You can move schon / noch within the middle field (between verb and sentence end) for emphasis, but common neutral options are:

Die Kleinen schlafen schon.
Die Kleinen schlafen schon jetzt. (emphasis on “already now”)

Putting schon or noch in the very first position (Schon schlafen die Kleinen) is possible but sounds more poetic / emphatic and is not the neutral everyday word order.

Does schlafen here mean “are sleeping” or “sleep” in general? How does German express the English present continuous?

Schlafen in Die Kleinen schlafen schon corresponds to English “are sleeping” in this context.
Standard German does not have a special continuous form like English am/is/are doing.
The simple present (schlafen) covers both “sleep” and “are sleeping”; context tells you which one is meant.