How to get Xiao and get past floor 9
Once you reach level 9 in the Divine Beast cave you'll come across an area that you need to jump across that Toan is not capable of. In order to do the jumping part of level 9 you must unlock you first Ally, Xiao. Also, it is worth keeping in mind that this will be the same pattern for all future dungeons. Once you progress down 9 or so floors you'll then have to design some of the town and acquire the ally specific to that area. Whatever their power is - is what is always required to pass onto the next floor and continue the dungeon
To get started with acquiring Xiao one must take the Changing Potion the gray haired guy gave you back to your house, fully complete your house using the ingame world builder tool and enter your house, you'll be given a cutscene (showed in the screenshot below) to name the cat. After the cutscene go up to the cat on your bed and press square; select the changing potion to acquire your first Ally, Xiao!
Xiao is an extremely powerful physical damage ranged fighter. In my honest opinion she is even stronger than Toan. She may shoot pebbles that do smaller amounts of damage but almost nothing will ever get to her and the only mobs she can't kill are those that block.