'Dinky' is an informal word meaning 'very small'.
The interesting thing is that there is a difference between British and American usages.
For BrE speakers, the word has a positive connotation - something which is 'dinky' is attractive, dainty, or cleverly made. If we use this word, we're often referring to how appealing appealing the object is. For example, you might look at a miniature dolls' house and say "Oh, just look at that dinky little teapot! It's got a tiny handle and lid and everything!' Or you might say "Look at this phone case - it's got a dinky little slot for a spare battery", meaning neat, convenient and cleverly designed.
According to the dictionary, the word has a negative association for American English speakers. The dictionary gives the definition "disappointingly small; insignificant" and the example: "I can't believe the dinky salaries they pay here". Other dictionaries give examples of 'dinky hotel rooms', meaning small and unimpressive.
Long story short: if a BrE speaker describes something as 'dinky', they approve of it; if an AmE speaker does the same, they disapprove of it.
I'm not surprised you're confused!