Learn Icelandic: Eitt skilti er stórt, en tvö eru lítil.

In Icelandic, the numbers 1, 2, 3, and 4 change their form to match the gender of the noun you are counting. The word for sign, skilti, is a neuter noun. Therefore, we must use the neuter forms eitt (one) and tvö (two) to match it.

Why is the word skilti left out of the second half of the sentence?

Just like in English, you don't need to repeat the noun if it is already obvious from the context. By saying tvö eru lítil, you are simply saying "two are small". The neuter plural words tvö and lítil make it grammatically clear that we are still talking about the signs.

Why does the word for big (stórt) end in a "-t"?

Adjectives have to agree with the gender and number of the noun they describe. Since skilti is a neuter singular noun, the base adjective stór (big) takes the neuter singular ending, becoming stórt.

What form of the adjective is lítil?

lítil is the neuter plural form of the adjective lítill (small). Because it is describing tvö (two) signs, the adjective has to be in the plural form to match the quantity.