Van Gaal unhappy with undisciplined Smalling
United centre-back Smalling picked up two careless yellow cards - one for impeding Joe Hart's attempted clearance, the other for a foul on James Milner - and was given his marching orders in the 39th minute.
His absence proved crucial as Sergio Aguero grabbed the only goal to help City secure a fourth successive league derby win for the first time since 1970.
And Van Gaal was clearly unimpressed by Smalling's actions, the United manager telling Sky Sports: "When you are on a yellow card, you know as a player you cannot do what he did.
"I said to the players [about being down to 10 men] but, in spite of that, they will not always follow what I have said.
"It's all about emotion and sometimes you cannot control it, but it was not very smart."
United took some plaudits from playing in a manner that belied their one-man disadvantage towards the end of the game.
That led Van Gaal to declare that his side is starting to come together, despite them sitting just inside the top half of the Premier League.
The boss added: "The willpower and labour was unbelievable. We you give that you can be very proud but, in the end, we have zero points.
"In sports, it's always the goals that count and we were so close in spite of playing with 10 men.
"We are close. You can see it every week but we need more points. The fans were applauding after the game and they can see the boys are willing to give everything."
The headache of Smalling's pending suspension was added to by his central-defensive partner Marcos Rojo being withdrawn in the second period.
His substitution, which added to United's well-documented injury issues in that area, meant the visitors ended the game with a makeshift back four featuring Antonio Valencia, Michael Carrick and youngster Paddy McNair.
Van Gaal said: "His shoulder is out [dislocated]. You never know how long that will take. We will see tomorrow [Monday] but I don't think he will play against Crystal Palace [on Saturday].
"But we have other very good players, so I don't cry for that [injuries] - although sometimes it's difficult to select the best team."