I'm new to game dev even though I've tried to pick it up many times and I'm always less on motivation  to continue I am hoping to finish a game this time.
So I'm a bit confused what the theme is?

A game jam theme is not meant to restrict you to a very specific kind of game. You are free to interpret the theme in whichever way you want, and the judges/players will then rate the way you incorporated the theme by how unique or how fun it was and any other criteria.

There are many different types of themes you could get in game jams. I would say this one is on the more restrictive side in my opinion though, but there's still plenty of things you could think of!

I'm doing an idle clicker game about creating a terrarium. Been wanting to make an idle clicker game anyway so this was a great chance.

My original idea was akin to "Army Men" with tiny characters in a massive area but it was just a living room or something.

The theme is more of a guideline. Take it literally or figuratively, or totally disregard it. Scoring high in theme is less important imo than making a game that's fun imo.

ye I could not really think of anything so tiny puzzle castle is what I am cooking.