To zoom out of your screen on the iPod Touch, put your forefinger and thumb on opposite corners of the screen, and then pinch inward. If you are zoomed in a lot, you should do this a few times.
You may also have noticed that that doesn't work, instead you should double tap it with three fingers.
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It sounds like the "Zoom" function is enabled on your phone.
Simply get three fingers and double tap the screen and it should zoom out.