Is creating a government agency to focus on taking guns away from citizens making the government smaller?
I don't think we read the same article. Here's the first statement...
The Trump administration has drafted plans to strip key authorities from the Bureau of Alcohol, Tobacco, Firearms and Explosives
Unless my reading comprehension is gone, this article is about striping power from government rather than creating a new agency. You can complain that Trump isn't going far enough, but I don't understand your point.