Barnið er með lítið sár á hendinni, svo ég set plástur á það.

Barn means child. The ending -ið is the attached definite article, so barnið means the child.

In Icelandic, the definite article is usually added to the end of the noun rather than written as a separate word. So:

• barn = a child / child
• barnið = the child

Also, barn is a neuter noun.

In everyday Icelandic, vera með is a very common way to express that someone has something, especially in conversational language.

So:

• Barnið er með lítið sár
  literally = The child is with a small wound
• natural English = The child has a small wound

Icelandic also has the verb hafa for to have, but vera með is extremely common in speech.

Because the adjective has to agree with the noun in gender, number, and case.

Here:

• sár = wound, and it is neuter singular
• the adjective lítill = small
• in the form that matches a neuter singular noun here, it becomes lítið

So:

• lítið sár = a small wound

This is a basic agreement pattern in Icelandic adjectives.

Because the preposition á can take different cases depending on the meaning.

1. Location: á hendinni

Here it means on the hand, with no movement involved, so Icelandic uses the dative:

• á hendinni = on the hand

2. Movement/placement: set plástur á það

Here someone is putting something onto something, so Icelandic uses the accusative:

• set plástur á það = put a plaster on it

So the same preposition, á, can mean both:

• on in a static sense → usually dative
• onto / on with motion or placement → usually accusative

The dictionary form is hönd = hand, but this noun is irregular.

Its forms change quite a bit, and in the dative singular it uses the stem hend-:

• hönd = nominative singular
• hendi = dative singular
• hendinni = dative singular definite, the hand

So á hendinni literally means on the hand in the dative definite form.

This is just one of those noun patterns that has to be learned.

With body parts, Icelandic often just uses the definite noun when the owner is obvious from context.

So:

• á hendinni naturally means on the hand
• in this sentence, it is understood as on the child’s hand

English often prefers a possessive like his hand or her hand, but Icelandic very often does not need one if the meaning is clear.

Here svo means so, therefore, or and so.

It connects the two ideas:

• the child has a small wound on the hand
• so I put a plaster on it

In other contexts, svo can also mean things like then or thus, so the exact meaning depends on context.

Most naturally, það refers to sár — the wound.

That makes sense because a plaster is put on the wound.

Grammatically, this works because sár is neuter singular, and það is also neuter singular.

One interesting detail: barnið is also neuter singular, so purely from grammar alone það could in theory refer to the child. But in normal context, the meaning is clearly the wound.

Because Icelandic has no separate indefinite article like a or an.

So:

• plástur = a plaster
• plásturinn = the plaster

In this sentence, the meaning is indefinite, so the bare noun plástur is used.

Set is the 1st person singular present tense of setja, which means to put or to place.

So:

• ég set = I put / I am putting

Some related forms are:

• ég set = I put
• þú setur = you put
• hann/hún/það setur = he/she/it puts

So the form matches the subject ég.

Here svo is being used as a conjunction meaning so, linking two clauses:

• Barnið er með lítið sár á hendinni, svo ég set plástur á það.

In that structure, ég set is normal.

If you said svo set ég..., that would sound more like then I put..., where svo functions more like an adverb at the front of the clause and triggers the usual Icelandic verb-second pattern.

So the difference is roughly:

• svo ég set... = so I put...
• svo set ég... = then I put...

Both can be possible in the right context, but they are not quite the same.