Context #1
Tom: So Sara, where are you from?
Sara: I’m from California.
Tom: Really? Me too! Where in California?
Sarah: I’m from San Diego. How about you?
Tom: I’m from San Diego too. Wow! It’s a small world!
Context #2
Chris: You know that new girl in our class? Well, I just found out that we grew up in the same neighborhood. We went to the same elementary school 30 years ago!
Sam:Wow! That’s amazing. What a small world!
Meaning: “a small world” is used to describe a situation where two people find out that they grew up together, live in the same apartment building, or have something truly amazing in common.