I am currently working on a project that requires a tiny pompom, and I found that one of the easiest ways to make a tiny pompom is with a fork.
Start by holding an 8" strand of yarn between the center prongs as shown below.
Next, wrap the yarn around the prongs of the fork. For an extra fluffy pompom you are going to want 50 to 60 wraps.
Once you have finished wrapping the yarn, you are going to use the 8" strand of yarn to tie around the center. Make sure to pull your yarn so that you have a nice, tight knot.
Now, simply slide your yarn off of the fork, and using sharp scissors snip through all of the loops on both ends of the pompom.
Fluff and trim into a nice round ball...