So, after trying every store (target, walmart, dept stores etc) I could think of in my search for panties for my very tiny DD I finally found some really small ones at Gap Kids. Bizarrely the XXS at Gap Kids is smaller than the smallest size at Baby Gap. For obvious reasons, it did not occur to me to look at Gap Kids when the ones at Baby Gap were to big until a salesgirl at Baby Gap told me the ones at Gap Kids were smaller. The hipster style seems to be the smallest. They are still a bit big for DD but smaller than anything else I've found.
Re: PSA for moms of tiny tots
At 21 mos she is about 31 inches and around 23 lbs (haven't officially weighed or measured her since the 18 mo appt). She's in the 60% for height but only btwn the 10% and 15% for weight (she varies a bit). Super healthy, just really active and petite. Still buying her 12-18 mos clothes and then still having to adjust the waists to make them smaller (she's too tall for the 6-12 stuff anymore).