Pyth, 53 bytes
L&>lb2qb_bL{u+G|{m|s-Fdkm,dy#df.EyMT./H]HbYh.mlbu'G]w
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Explanation
Is b an eligible palindrome?
L # Declare a lambda `g(b)` … & # … which tests if both of the following are true: >lb2 # b is more than 2 characters long? qb_b # b is equal to the reversed form of itself?
Remove a single palindrome
This lambda tries to find all the ways to remove a single palindrome. We accept a list of strings. For each string, we try to remove a single palindrome. If we can’t find any palindromes, then that means the string can’t be made smaller and is a potential winning candidate, so we keep it in the list. If we have a palindrome, then we remove it and keep the result. If we find more than one palindrome, we don’t know yet which one is best, so we remove each palindrome separately and keep all the results.
Y # We’re going to use reduce, so start with an empty list. b # Our input, the list of strings. Let’s feed it into reduce. H # Maybe the string contains no palindromes. If so, keep it around … ] # … but for interface parity, let’s wrap it in a singleton list. H # With that out of the way, take the characters from our string … ./ # and explode it into a massive list of all possible substring partitions. yMT # For each substring, check whether it is a valid palindrome … .E # … and if that happens at least once in our partition, then … f # … keep the partition around, otherwise throw it away. y#d # In our right hand, we take the substrings that are palindromes … m,d # … in our left hand, we take the partition itself … -Fd # … and fold them into each other, eliminating the palindrome. # Conveniently, folding has removed each palindrome separately, # and multiple palindromes have automatically split into two separate # intermediate results. This is good, because we don’t know yet # which palindrome was the best one to remove, so let’s keep all the options. m s # Each result is still in form of a partition, so mend it back into a string. | k # Is our partition empty? If so, fix the mess that `s` has made with its default value 0. { # Our power-set shenanigans are causing abysmal performance, so let’s # deduplicate what we have to counteract the effect at least a little. | # If there were no palindromes at all, fall back to the singleton list we prepared earlier. u+G # Repeat for each input string and collect results. { # Deduplicate the resulting list once again … L # … and define a lambda named `'` so we can repeat all of the above over and over.
Main routine
w # Start with the input string … ] # … and wrap it inside a singleton list. That’s our initial state. 'G # From each list element, try removing a single palindrome … # … while keeping track of intermediate solutions … u # … over and over again, until our list no longer changes. # The list elements are now our potential winning candidates. lb # Look at the number of characters … .m # … of each candidate. Those with minimal length are our solutions. h # More than one solution? If so, pick the first one.
canacandothecancan=>andothecancan\$\endgroup\$