The logic for a "small" reactor is that it's one that can rely on passive cooling in the event of a shutdown so that it doesn't have to be actively cooled to avoid a meltdown.

The "modular" part is the idea that you then produce more of them lowering unit cost and install many more than is typical at a site.

This also potentially allows you to have more control of plant energy output and respond faster to grid needs.

Recall that the fukushima meltdown was caused after the cooling failed. The reactor building survived the tsunami and the reactors were shutdown. The problem is the diesel backup generators used to run the coolant pumps were flooded.