The correct sequence is IV, II, I, III.

• Word: This is the smallest unit of meaning in language. 
• Phrase: A group of words that form a unit within a sentence, but do not express a complete thought. 
• Sentence: A group of words that express a complete thought. 
• Essay: A longer piece of writing that usually discusses a particular topic in detail.

Why other options are incorrect:

• Option 2: While "Word" is the smallest unit, a phrase is not necessarily made up of just one word. It could contain multiple words. Therefore, this sequence is not logical. 
• Option 3: A sentence is made up of phrases, not the other way around. This option reverses the logical progression from smallest to largest unit. 
• Option 4: While a phrase is a part of a sentence, an essay is not necessarily made up of just sentences. It could contain paragraphs, sections, and other elements. This option also does not reflect the logical hierarchy from word to phrase to sentence to essay.