Land area larger when finally reduced! (5)
I believe the answer is:
'land' is the definition.
(islet is a kind of land)
'area larger when finally reduced' is the wordplay.
I cannot quite understand how this works, but
'area' could be 'isle' (I have seen 'Area of land' mean 'isle' so perhaps 'area' could also mean 'isle') and 'isle' is located in the answer.
A single letter 't' remains which might be clued in a way I don't understand.
This may be the basis of clue (or it may be nonsense).
Can you help me to learn more?
(Other definitions for islet that I've seen before include "Tiles (anag.)", "Stile (anag)", "Ait or eyot", "Little bit of land", "One of Langerhans's".)