Understatement is the opposite of hyperbole – instead of exaggerating, it makes a situation seem better, easier, or less important that it really is. For example, if people around you are shivering with cold and you say, “It’s a bit chilly today, isn’t it?” you would be using understatement. Writers may use it as a technique to create humour or to comment on the personality of the character who is using the understatement.
Litotes is a specific kind of understatement. Litotes uses a negative and an opposite to create the understatement. For example, “Her cooking was far from bland.” The negative is “far from” (not) and “bland” is the opposite of “spicy”. You can deduct from this understatement that the cooking was, in fact, very spicy. Litotes can be a more tactful way to criticise something; it can also express modesty, humour and irony.