IPA: /ˌʌndərˈsteɪtmənt/
KK: /ʌndərˈsteɪtmənt/
A statement that makes something seem less important or serious than it really is.
His comment about the disaster was an understatement; it was much worse than he described.
Understatement → It is formed from "under-" (meaning below or less than) and "statement" (from Latin "stare", meaning to stand). The word refers to a statement that presents something as less significant than it is, hence standing below the actual importance.
Think of saying something is 'less than' ('under-') what it really is — that's why understatement means to present something as less significant.