Yes, you can reset a word or phrase back to the Unstarted level. On every entry (word, phrase, dialogue), you should see a "Reset Level" option:
When you click on this it will ask for confirmation, showing you the current level of the word/phrase (in this case Level 8), and warning you that it will be reset to the Unstarted level:
If you click on Reset, it will reset the level to Unstarted, which you can then see displayed:
Why would you want to do this? Well, it's an easy way to get Lingopolo to give you some extra practice for a word or phrase, since it will make Lingopolo think you have never yet practiced this word or phrase.