Why is Bethlehem called 'little' in Micah 5:2?

Because the prophet is placing the Messiah's birthplace inside a pattern the Hebrew Bible has been running since Genesis — the elevation of the small.

Micah 5:2 reads:

וְאַתָּ֞ה בֵּֽית־לֶ֣חֶם אֶפְרָ֗תָה צָעִיר֙ לִֽהְיוֹת֙ בְּאַלְפֵ֣י יְהוּדָ֔ה מִמְּךָ֙ לִ֣י יֵצֵ֔א לִֽהְי֥וֹת מוֹשֵׁ֖ל בְּיִשְׂרָאֵ֑ל

"And you, Bethlehem Ephrathah, too little (tsa'ir) to be among the clans of Judah — from you shall come forth for me one who is to be ruler in Israel." — Micah 5:2 (MT, numbered 5:1 in the LXX and Hebrew Bible editions)

The Hebrew word is צָעִיר (tsa'ir, H6810). It means "young, insignificant, least" — the same word Gideon used of himself in Judges 6:15 ("I am the least in my father's house") and the same word Gen 25:23 used of Jacob in the womb-oracle ("the elder shall serve the younger") and Gen 48:14 used of Ephraim when Jacob crossed his hands to bless the younger grandson.

When the prophet says Bethlehem is tsa'ir, he is not merely naming a small town. He is placing the Messiah's birthplace in the canonical pattern of small-ones-elevated. Bethlehem was Jesse's hometown (1 Sam 16:1); it was the setting for David's anointing "from the sheep" (1 Sam 16:11) — David the ha-qaton, "the youngest." Micah makes the connection explicit: the Messiah will come from the town of David's selection, and he names it in the same vocabulary that marked David's smallness.

The Septuagint translates tsa'ir here as ὀλιγοστός (G3641 semantic family) — "very little." The same Greek root (ὀλίγος, "few") appears in Matthew 20:16's "for many are called, few (ὀλίγοι) are chosen." The election vocabulary of Jesus's kingdom saying sits in the same Greek semantic field as the Micah prophecy about his birthplace. The "few" who are chosen come from the "little" place.

Then Matthew quotes Micah in Matthew 2:6 — and changes the wording:

"And you, Bethlehem, in the land of Judah, are by no means the least (oudamōs elachistē) among the rulers of Judah; for from you shall come forth a ruler who will shepherd my people Israel." — Matthew 2:6

Matthew does not simply quote Micah. He rewords it. Where Micah's Hebrew said tsa'ir ("too little") and the LXX said ὀλιγοστός ("very little"), Matthew writes οὐδαμῶς ἐλαχίστη — "by no means the least." The rhetorical inversion is the point.

This is deliberate. Matthew is announcing that the pattern has arrived at its resolution. The town that the prophet called "too little to be among the clans of Judah" is — now that the Messiah has been born there — "by no means the least." Matthew uses Micah's own vocabulary to say the smallness has been reversed. The town is no longer counted small, because the Ruler has come forth from it.

This is how the Bible's entire youngest-chosen pattern reaches its climax. The pattern had been running through Isaac, Jacob, Ephraim, Gideon, David — the smaller always receiving what the larger was supposed to have. Bethlehem was the small town that produced the smallest son of Jesse who became Israel's greatest king. And now the Messiah comes from the same small town, born to a young woman with no pedigree-boast to make, announced by a Magnificat that sings the pattern in the voice of its final vindication:

"He has brought down the mighty from their thrones and exalted those of humble estate." — Luke 1:52

Bethlehem is called "little" in Micah because the pattern is true. The Messiah comes from the tsa'ir place because God has always chosen the small. And Matthew insists, in the very act of quoting Micah, that the smallness has been made great — by the One born there.

For the full treatment of the tsa'ir vocabulary, the Gideon/Saul counter-case, and the pattern from Isaac through the Magnificat, see the study The Youngest Chosen.