Το πασαλάκι είναι μικρό.

• Το = the definite article, the
• πασαλάκι = a noun
• είναι = the verb is
• μικρό = an adjective, small

So the structure is:

article + noun + verb + adjective

Το is the neuter singular definite article. It means the.

It is used because πασαλάκι is a neuter singular noun, so the article has to match it:

• masculine: ο
• feminine: η
• neuter: το

Here, the noun is neuter, so Greek uses το.

Because adjectives in Greek must agree with the noun they describe.

Since πασαλάκι is neuter singular, the adjective also has to be neuter singular:

• masculine: μικρός
• feminine: μικρή
• neuter: μικρό

So Το πασαλάκι είναι μικρό is correct because both the noun and the adjective are neuter singular.

Because here μικρό is a predicate adjective: it comes after the verb to be and tells you something about the subject.

So:

• Το πασαλάκι είναι μικρό. = The peg/stake is small.

If you put the adjective before the noun, you get a noun phrase instead:

• το μικρό πασαλάκι = the small peg/stake

So the difference is:

• το μικρό πασαλάκι = the small peg
• το πασαλάκι είναι μικρό = the peg is small

Είναι is the present-tense form of είμαι, which means to be.

In this sentence, it means is.

A useful thing to know is that είναι is used for both:

• he/she/it is
• they are

In this sentence it is clearly is, because the subject το πασαλάκι is singular.

Yes, that is a very good clue.

Nouns ending in -ι are often neuter, and -άκι is also a very common neuter ending.

Also, -άκι is often a diminutive ending in Greek, meaning something like little or small. So learners often notice that this word already sounds like a smaller version of something.

Even so, grammatically you should simply treat πασαλάκι here as a regular neuter singular noun.

Because the two things are not exactly the same.

The ending -άκι often forms a diminutive, but in many words that form becomes just the normal everyday word. So πασαλάκι can simply be the standard noun someone uses.

Adding μικρό still makes sense because it directly describes size: small.

So this is not necessarily strange in Greek. A word can contain a diminutive ending and still be described as μικρό.

A rough English-style pronunciation is:

to pa-sa-LA-kee EE-ne mee-KRO

More exactly by word:

• Το → to
• πασαλάκι → pa-sa-LA-ki
• είναι → EE-ne
• μικρό → mee-KRO

The accent mark shows which syllable is stressed:

• πασαλάκι
• είναι
• μικρό

In Modern Greek, the accent mark shows which syllable gets the stress.

So:

• πασαλάκι → stress on λά
• είναι → stress on εί
• μικρό → stress on ρό

This is important because stress is a real part of the word in Greek. If you stress the wrong syllable, your Greek may sound unnatural or may even be misunderstood.

Yes. Greek word order is more flexible than English word order.

Το πασαλάκι είναι μικρό is a normal, neutral way to say it.

But Greek can move things around for emphasis, for example:

• Μικρό είναι το πασαλάκι.

That still means the same basic thing, but the emphasis is different, something like It’s the peg that is small or The peg is small with focus on small.

So the sentence you were given is the most straightforward version.

Usually, with a specific countable noun like this, το is the natural choice.

Greek uses the definite article very often, and much more regularly than English in many situations.

So:

• Το πασαλάκι είναι μικρό. = natural, standard
• Πασαλάκι είναι μικρό. = generally odd by itself

In other words, the article is an important part of the normal sentence here.

It would become:

Τα πασαλάκια είναι μικρά.

Notice the changes:

• το → τα for neuter plural
• πασαλάκι → πασαλάκια for plural
• μικρό → μικρά so the adjective agrees with the plural noun
• είναι stays είναι

So Greek shows the plural on the article, the noun, and the adjective.