A compact is a signed written agreement that binds you to do what you've promised. It also refers to something small or closely grouped together, like the row of compact rental cars you see when you wanted a van.
As a verb, compact means "to compress or squeeze together," like how the garbage truck compacts your bags of trash. Compact, the adjective, describes something that is tightly packed together, like your luggage that is so compact it fits in the overhead compartment. Compact can also describe a brief summary, like a compact explanation of how the universe began that lasted only 10 minutes!