Understatement is used to convey that something is less important than it really is. It is often used ironically when the opposite of this response is more appropriate and in fact what you are saying is about something very significant or important or serious.

understatement
noun
the presentation of something as being smaller, worse, or less important than it actually is.
“a master of English understatement”
synonyms:  minimization, trivialization, euphemism

Quotes about the  understatement:
“The way you walk is slash and burn.
Like understatement’s now a crime.” ― Justin Quinn
“The most beautiful description  of a woman is by understatement.”  –  William Faulkner, American novelist
“The understatement is the English contribution to comedy.”  –  Jim Davis

An understatement is a figure of speech employed by writers or speakers to intentionally make a situation seem less important than it really is. For example:
When it is discovered that your wife is pregnant with triplets, and you calmly say ” a few more than we expected” that is an understatement.
Or when the Irish refer to their 100-year-old violent civil war as ‘The Troubles’, that too is an understatement.
An understatement is deliberately less intense than the statement that should be expected given whatever the circumstance. with an ironical tone. An understatement is opposite to another figure of speech hyperbole or an overstatement, which are usually extreme overreactions or and exagerated response.

examples of understatement

In Salinger’s Catcher in the Rye, Holden Caulfield says:
“I have to have this operation. It isn’t very serious. I have this tiny little tumor on the brain.” (Having a tumor in the brain is pretty life threatening.)
“It’s just a flesh wound.” –  says  ‘The Black Knight’, after having both arms cut off, in ‘Monty Python and the Holy Grail’
“This is gonna ruin my whole day.” – Dr. Grace Augustine character’s quote after receiving a fatal gunshot wound in James Cameron’s movie, Avatar

An understatement is a tool that helps to develop other figures of speech such as irony and sarcasm by deliberately decreasing the severity of a situation when an intense response is expected by the listeners or the readers. It is used a lot to humorous effect, often sarcastic humor, when overstatement is perhaps called for.