It’s actually a ten-way tie! There are ten places in the world with names consisting of one single letter.
Among them are Å in Norway, Ö in Sweden and Y in both Alaska and France. See the full list here.
On the other hand, the longest place name belongs to Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch, a large village on the island of Anglesey in Wales.
Apparently the name wasn’t always as lengthy. According to tour guide Dave Fox, "Originally the town had a shorter, easier to pronounce name: Llanfairpwllgwyngyll. In the 1880s, in a joking attempt to attract tourists, a tailor added the rest of the syllables, bringing the total length to 58 letters, including four letter L's in a row."