From the Leonard Mlodinow’s The Drunkard’s Walk: How Randomness Rules Our Lives:
Going against the law of small numbers requires character. For while anyone can sit back and point to the bottom line as justiﬁcation, assessing instead a person’s actual knowledge and actual ability takes conﬁdence, thought. good judgment, and, well, guts. You can’t just stand up in a meeting with your colleagues and yell, “Don’t ﬁre her. She was just on the wrong end of a Bernoulli series.” Nor is it likely to win you friends if you stand up and say of the gloating fellow who just sold more Toyota Camiys than anyone else in the history of the dealership. “It was just a random ﬂuctuation.” And so it rarely happens. Executives’ winning years are attributed to their brilliance, explained retroactively through incisive hindsight. And when people don’t succeed, we often assume the failure accurately reﬂects the proportion with which their talents and their abilities ﬁll the urn.
The law of small numbers, in context of the quote here, says that people believe that a small sampling of a large urn of different-colored balls will be representative of the proportions of colored balls as a whole. This is not the true, but people are biased to believe it. This is compared to the Law of Large Numbers, which says that if you make a large continuous sampling, it will eventually limit towards the true proportion—which is true, but large is large.