They were all waiting for our new leader. But he died.
Pai observes that her tribe are waiting for the new leader to emerge; traditionally he would be the first born grandson of the Paikea. However, Pai knows that her twin brother was supposed to be the new leader of the tribe. He died shortly after his birth, and their mother died as well, leaving only a graddaughter to take the tribe forwards. This is unacceptable to Koro and the rest of the tribe, who are still waiting for a boy child to emerge and lead them. This leads to frustration because they are waiting for something or someone who is never going to come.
If you have the tooth of a whale, you must have the jaw of a whale to wield it.
This statement explains the tradition of throwing a whale tooth into the ocean for the new leader of the tribe to find. He who is able to find and retrieve the whale's tooth is said to be the leader. Koro is explaining that if one has a whale's tooth, one must also have a whale's jawbone - not literally, of course, but one said to have a jaw as strong as a whale is said to have a quiet and determined power. The new leader must be a strong person, and make decisions wisely, for the good of the tribe.
Koro throws the whale's tooth into the ocean fully expecting that one of the class of boys he has been teaching will dive down and find it. None of them does, and so his new leader does not emerge in the way he had intended it would. Instead, Pai manages to retrieve the tooth. This should be a sign to her grandfather that she is the one destined to lead the tribe and that she has the strength of the whale required to do so.