Ég set smá kanil og engifer í teið.

Set is the 1st person singular present tense of setja.

• setja = to put, place, set, add
• ég set = I put / I add

In a sentence like this, English often translates setja as add, even though the basic meaning is put.

Here smá means a little or some.

It is very common before uncountable things like spices, food, or ingredients:

• smá sykur = a little sugar
• smá mjólk = a little milk
• smá kanil = a little cinnamon

In this use, smá behaves like a quantity word and usually stays the same form.

Because kanill is the dictionary form or nominative singular, but here the word is the direct object of setja, so it appears in the accusative.

• nominative: kanill
• accusative: kanil

So:

• Ég set kanil ... = I put cinnamon ...

This is a very common pattern with masculine nouns in Icelandic.

Because engifer does not change here between nominative and accusative.

So while kanill changes to kanil, engifer remains engifer. That is normal for some Icelandic nouns, especially certain neuter or borrowed words.

Because í can take either the accusative or the dative, depending on meaning.

• accusative after í = movement into
• dative after í = location in

Here the idea is putting something into the tea, so Icelandic uses the accusative:

• í teið = into the tea

If you were describing something already being in the tea, you would use the dative:

• í teinu = in the tea

The ending -ið is the definite article, meaning the.

So:

• te = tea
• teið = the tea

Icelandic usually attaches the to the end of the noun instead of putting a separate word before it.

Because kanill and engifer are being used as general ingredients, not as specific previously mentioned items.

That is very natural in Icelandic, just as in English:

• I add cinnamon
  not necessarily
• I add the cinnamon

So the bare nouns here simply mean cinnamon and ginger as substances.

Yes. In this sentence, smá naturally applies to the whole pair:

• smá kanil og engifer = a little cinnamon and ginger

If you wanted to make it extra explicit, you could repeat it, but you do not need to:

• smá kanil og smá engifer

The original version sounds normal and natural.

No, it is a very normal Icelandic sentence order:

• Ég = subject
• set = verb
• smá kanil og engifer = direct object
• í teið = prepositional phrase

So the structure is basically:

Subject + Verb + Object + Prepositional phrase

That is a very common neutral word order in Icelandic.

Either can work, but add is often the most natural English translation in this context.

So although setja basically means put, this sentence would often be translated as:

• I add a little cinnamon and ginger to the tea

rather than the more literal:

• I put a little cinnamon and ginger into the tea

Both are correct; add just sounds more natural in English for ingredients.