Small element close to lunacy (4)
I believe the answer is:
Here is my best explanation:
'small' is the definition.
('tiny' can be similar in meaning to 'small')
'element close to lunacy' is the subsidiary indication.
'element' becomes 'tin' (tin is a kind of element**).
'close to' says to take the final letters (the \'close\' to the word).
The final letter of 'lunacy' is 'y'.
(Other definitions for tiny that I've seen before include "Extremely small", "Small child", "Insignificant", "Little", "Miniscule", "Minute, diminutive", "pocket", "minute", "Underdeveloped" and "Minuscule".)