“Small terror” was, according to modern historians, the first stage of the eventual mass murder of the Jews in Eastern Europe. They refer to, in occupied Poland, the uprooting of smaller Jewish communities and moving them into designated areas; or, elsewhere, moving larger Jewish communities into ghettos.
At the time, this was simply renewing the medieval practice done throughout Europe of confining Jews to walled ghettos. In fact, the Nazis followed the medieval method to the T – using old medieval castles and enclaves from back in the day; walling in areas that could be done so effectively.
(As an aside, consider the fad of walled communities for the well to do, especially for the extremely wealthy.)
The exact opposite had occurred 15 years earlier, when millions of Germans impoverished by the Great Depression were displaced from their homes (evicted!) to the cities; at which time their homes and villages were occupied by Jews, who were the only people left with any money because they had “diversified” outside the country before the depression hit (a massive efflux of funds which quite likely caused, or at least deepened, the depression).
Be that as it may, once the Jews were set up in their traditional ghetto (urban) lifestyle, they were free to live absent all the anti- Jewish laws at large (as often as not to protect them from the extreme animosity of the general population, still bitter – and still dirt poor – about the Jews’ role in the Great Depression).
There were plenty of factory jobs where Jews could earn a decent wage in the cities. Unemployment in Germany had long since been zero percent, and good jobs were available in a hundred different types of manufacturing facilities.
But the Jews would not or could not do manual labor. They were traders, shopkeepers, merchants, and above manual labor. It’s not unlike the millions of unemployed Americans or those on welfare – who refuse to work beneath their station.
The American response to the economic severity of the Great Depression was to relocate millions of workers to work on various public works projects: roads, dams, conservation projects. All these workers lived in makeshift tent cities. The Jews’ ghettos were heaven by comparison.
The Russians, meanwhile, just waited for winter and all the excess workers there – tens of millions of them – quietly died of starvation and the extreme cold.
A stone’s throw away from the Russian wasteland, bundled up and eating 3 square meals a day, the Jews in the Polish ghettos must have felt quite fortunate by comparison. Alas, many of the frozen dead Russians were fellow Jews.