You are certainly right in bringing out this SEEMING CONTRADICTION in the words “little” and “not the least,” but the Bible NEVER CONTRADICTS ITSELF so we must discern why the Spirit of God uses these different words. I believe it is simple, for in Micah 5:2 the Spirit wanted to draw the clear CONTRAST between the “LITTLE TOWN of Bethlehem with the GREAT RULER (the Messiah of Israel, the Lord Jesus Christ) who would be born there. Let’s read the whole verse from the New King James Version: “But you, Bethlehem Ephrathah, through YOU ARE LITTLE among the thousands of Judah, YET OUT OF YOU shall come forth to Me the One to be Ruler in Israel, whose going forth are from of old.” One commentor says this: “The ‘littleness” of Bethlehem is noted, perhaps a reminder that God so often chooses the little things of the world to confound the greater (1 Corinthians 1:27). Another commentator wrote this: “Micah gives the sentence the turn he does, for the purpose of bringing out sharply the contrast between the natural SMALLNESS of Bethlehem and the EXALTED DIGNITY to which it would rise, through the fact that the Messiah would issue from it.” I’m sure the proud men of Micah’s day would be repulsed by the announcement of their Messiah being born in a “little town” like Bethlehem instead of a “big city” like Jerusalem.

Now let’s read Matthew 2:1-6: “Now after Jesus was born in Bethlehem of Judea in the days of Herod the king, behold, wise men from the East came to Jerusalem, saying, ‘Where is He who has been born King of the Jews? For we have seen His Star in the East and have come to worship Him.’ When Herod the king heard this, he was troubled, and all Jerusalem with him. And when He had gathered all the chief priests and scribes of the people together, he inquired of them where the Christ was to be born. So they said to him, ‘In Bethlehem of Judea, for thus it is written by the prophet: But YOU, Bethlehem, in the land of Judah, are NOT THE LEAST AMONG THE RULERS OF JUDAH; for out of you shall come a Ruler who will shepherd My people Israel.’” In Matthew the Spirit of God wanted to draw a clear CONTRAST between ‘the RULERS of Judah with the GREATEST RULER ever to be born, the Lord Jesus Christ.” As we saw, Micah focused on the TOWN (which was indeed LITTLE among all the towns in Judah but would become famous for being the birthplace of their Messiah). Matthew focuses more on the RULER (which was “NOT THE LEAST of all the rulers of Judah but the GREATEST”). After this RULER was born one who had to say of the town itself (which was identified with the RULER), “You are NOT THE LEAST among the rulers of Judah.”

I would add that Matthew’s focus (on the RULER who had been born in comparison to other “rulers of Judah”) is borne out by the visit of the “wise men from the East” (who wanted to worship this GREAT KING). They realized that He was indeed the “GREATEST of all the rulers of Judah.” And if one has a problem with Matthew not quoting the same exact words from Micah I could turn to many instances where the Lord Jesus or one of the apostles made slight changes while quoting Old Testament references. In each case they had the liberty of making those changes to emphasize a certain truth relevant to the context of the subject they were speaking on.  (DO)  (678.3)