Small squad has old power (5)
I believe the answer is:
steam
'old power' is the definition.
'small squad' is the wordplay.
'small' becomes 's' (abbreviation - e.g. clothes size).
'squad' becomes 'team' (synonyms).
's'+'team'='STEAM'
'has' is the link.
(Other definitions for steam that I've seen before include "Energy (colloq.)" , "Watery vapour" , "Hot water suspended in air" , "Hot water vapour" , "Sort of water" .)