Its population was literally very small (8)
I believe the answer is:
lilliput
'small' is the definition.
Although both the answer and definition are singular nouns, I can't see how they can define each other.
I cannot understand how the rest of the clue works.
Can you help me to learn more?
(Other definitions for lilliput that I've seen before include "Dean Swift's land of little people compared to Gulliver" , "Swift's land of tiny people" , "Land visited by Gulliver" , "short race here" , "Swift creation" .)