As soon as you enter Minish Woods, keep heading right while fighting off the Octorocks until you get to a fork in the road. Head down towards a tree stump while fighting off all of the Green Chu-Chus and you will hear someone calling for help. Head back the way you came and you will see a talking cap being attacked by a few Octoroks. Kill them and he will ask to join you.
The cap's name is Ezlo and he will come in handy during your journey across Hyrule. Unfortunately, this cap is a little rude because Link walks too fast. He will jump on your head and stay there for the rest of the game. Now head to the tree stump again. Ezlo will tell you to get on top of the stump. He explains that the Picori are tiny and that this tree stump will make you the size of a Minish. He will soon utter some magic words and you will be shrunk down in to the size of a bug.
Next you should head to the left through a log until you come to a pond. Since you can't swim until later in the game, you will have to wait until the lily pad gets to you and jump on it. Ride the lily pad to the section of land to the north. You will then come to a dirt road littered with twigs and acorns. Follow the path and you will enter the Minish Village.
When you enter Minish Village some Minish notice you and start talking to you. But as they talk Minish you and Ezlo can't understand what they are saying. Ezlo says there are perhaps somebody here who understands your language.
Head right until the first fork and then go up. There you will find a big stone house. Go in inside the house and talk to the Minish inside. You learn that his name is Festari. He also notices that you have problem with the Minish language and tells that you need to eat a Jabber Nut so you can understand Minish.
Head right again and then south until the first fork and then turn right. Go down the ladder and go up and push the box in the front of you left or right. Go to the nut and eat it.
When you have learned Minish, climb up from the barrel and then go back to the stone house. Festari says that you should go to the Elder about the sword. Go out and go to the left until you see a ladder. Climb the ladder and go inside and talk to the Elder.
The Elder says that you need four elements to get the Picori sword reforged. He will mark where the elements are found and say that the earth element can be found in a shrine north of Festari's abbey. He also warns about beasts inside the shrine. Go back to Festari's abbey and talk to Fesrari. Now go north into Deepwood Shrine.