So I am building a 5x5 foot patio on a hill for a fire pit. Across that distance the elevation change is only an inch. should I build a mini retaining wall first so the bottom of the patio will be perfectly level with the uphill part? or do I not even need to worry about the elevation change here?

1 inch isn't a big deal. If you're pouring a 4" thick slab, just let the lower side raise up 1" above grade and 3" below. If you lower the high side you will end up with silt and debri all over it every time it rains.

just dig a footing 12"x12" on edges form level pour

You want to build a level space first. I would suggest excavating an area slightly larger than the size you want for the patio, and leveling it. You will also want to take into account drainage, subsidence, frost heave, and the material you're using to make the patio.

It's really hard to give specific advice though, because of a lack of details. You can't ignore the elevation change, no, but it might not be a significant factor.