What does it mean by '4M blocks' or '4G blocks' in Oracle?
In this case 4G and 4M aren't quite referring to what I think you mean by the unit of digital storage; it isn't referring to 4 gigabytes and 4 megabytes. It's just a number, not a unit.

Oracle has to keep track of the blocks in the tablespace, and appears to be limited to a 32-bit 'address' space (2^32 = 4,294,967,296 = 4G). So it can internally reference up to 4G blocks of data. The distinction between bigfile and smallfile is that bigfile can reference one huge file with all 4G blocks in it, which smallfile can reference up to 1022 files with up to 4M blocks in each. (There seems to be some overhead somewhere, since it's 1022 instead of 1024). The total number of blocks ends up being (almost) the same, they're just organised differently.

So far this has little to do with how much actual data that is. This is where the database block size comes in. If you have a 4KB (4096 byte) block size, a bigfile can be up to 4G x 4096 bytes, or 16TB; while with smallfiles each file could be up to 4M x 4096 bytes, or 16GB. As you can have 1022 files, the total available storage is (almost) the same. If your database blocksize is twice as big, 8KB, the bigfile can also be twice as big, up to 32TB; and each smallfile can similarly be up to 32GB.

The bigfile documentation may help explain it better than I can. (Though confusingly that uses '32K' to mean 32 kilobytes, which is normally clear but when also talking about 4G blocks it might have been better to use '32KB'... I'm not opining on which is 'correct'!)