dnsmasq: failed to create listening socket: Address already in use
The issue is that you have configured dnsmasq to provide TFTP service (via the enable-tftp option in dnsmasq.conf). The service port for TFTP is UDP/69, so dnsmasq wants to bind to it, but xinetd has already done so, and it is impossible for two different processes to bind to the same service port.
If you want dnsmasq to provide TFTP service, you will need to edit the xinetd configuration (likely /etc/xinetd.conf) to turn off its TFTP service. Or, if you prefer to have xinetd provide TFTP service, then you will need to remove enable-tftp from dnsmasq.conf.