Dynamically generating elements of list within list

You could use itertools here, in your case I would use chain and islice

import itertools
a1 = ['x1','y1','z1']
a2 = ['w2','x2','y2','z2'] 
a3 = ['p3','r3','t3','n3']
list1 = [a1,a2,a3]

def flatten_and_batch(lst, size):
    it = itertools.chain.from_iterable(lst)
    while True:
        res = list(itertools.islice(it, size))
        if not res:
            break
        else:
            yield res

list(flatten_and_batch(list1, 2))
# [['x1', 'y1'], ['z1', 'w2'], ['x2', 'y2'], ['z2', 'p3'], ['r3', 't3'], ['n3']]

list(flatten_and_batch(list1, 3))
# [['x1', 'y1', 'z1'], ['w2', 'x2', 'y2'], ['z2', 'p3', 'r3'], ['t3', 'n3']]

If you don't mind an additional dependency you could also use iteration_utilities.grouper (although it returns tuples not lists) ¹ here:

from iteration_utilities import flatten, grouper, Iterable

>>> list(grouper(flatten(list1), 2))
[('x1', 'y1'), ('z1', 'w2'), ('x2', 'y2'), ('z2', 'p3'), ('r3', 't3'), ('n3',)]

>>> list(grouper(flatten(list1), 3))
[('x1', 'y1', 'z1'), ('w2', 'x2', 'y2'), ('z2', 'p3', 'r3'), ('t3', 'n3')]

or the iteration_utilities.Iterable:

>>> Iterable(list1).flatten().grouper(3).as_list()
[('x1', 'y1', 'z1'), ('w2', 'x2', 'y2'), ('z2', 'p3', 'r3'), ('t3', 'n3')]

>>> Iterable(list1).flatten().grouper(4).map(list).as_list()
[['x1', 'y1', 'z1', 'w2'], ['x2', 'y2', 'z2', 'p3'], ['r3', 't3', 'n3']]

¹ Disclaimer: I'm the author of that library.

Timings:

from itertools import chain, islice
flatten = chain.from_iterable
from iteration_utilities import flatten, grouper, Iterable

def slicer(seq, n):
    it = iter(seq)
    return lambda: list(islice(it,n))

def my_gen(seq_seq, batchsize):
    for batch in iter(slicer(flatten(seq_seq), batchsize), []):
        yield batch

def flatten_and_batch(lst, size):
    it = flatten(lst)
    while True:
        res = list(islice(it, size))
        if not res:
            break
        else:
            yield res

def iteration_utilities_approach(seq, size):
    return grouper(flatten(seq), size)

def partition(lst, c):
    all_elem = list(chain.from_iterable(lst))
    for k in range(0, len(all_elem), c):
        yield all_elem[k:k+c]


def juanpa(seq, size):
    return list(my_gen(seq, size))    
def mseifert1(seq, size):
    return list(flatten_and_batch(seq, size))   
def mseifert2(seq, size):
    return list(iteration_utilities_approach(seq, size))   
def JoelCornett(seq, size):
    return list(partition(seq, size))       

# Timing setup
timings = {juanpa: [], 
           mseifert1: [], 
           mseifert2: [], 
           JoelCornett: []}

sizes = [2**i for i in range(1, 18, 2)]

# Timing
for size in sizes:
    print(size)
    func_input = [['x1','y1','z1']]*size
    for func in timings:
        print(str(func))
        res = %timeit -o func(func_input, 3)
        timings[func].append(res)

%matplotlib notebook

import matplotlib.pyplot as plt
import numpy as np

fig = plt.figure(1)
ax = plt.subplot(111)

for func in timings:
    ax.plot(sizes, 
            [time.best for time in timings[func]], 
            label=str(func.__name__))
ax.set_xscale('log')
ax.set_yscale('log')
ax.set_xlabel('size')
ax.set_ylabel('time [seconds]')
ax.grid(which='both')
ax.legend()
plt.tight_layout()

It is relatively trivial if you break the task into two steps:

1. Flatten the list.
2. Emit chunks based on batch size.

Here is an example implementation:

from itertools import chain

def break_into_batches(items, batch_size):
    flattened = list(chain(*items))
    for i in range(0, len(flattened), batch_size):
        yield flattened[i:i+batch_size]

Given the following objectives applied to a list

1. yield batches, each of a given size
2. repeat this process some number of cycles

more_itertools can achieve these objectives as follows:

import more_itertools as mit


def batch(iterable, size=2, cycles=1):
    """Yield resized batches of an iterable."""
    iterable = mit.ncycles(iterable, cycles)
    return mit.chunked(mit.flatten(iterable), size)

list(batch(list1, 3))
# [["x1", "y1", "z1"], ["w2", "x2", "y2"], ["z2", "p3", "r3"], ["t3", "n3"]]


list(batch(list1, size=3, cycles=2))
# [["x1", "y1", "z1"], ["w2", "x2", "y2"], ["z2", "p3", "r3"],
#  ["t3", "n3", "x1"], ["y1", "z1", "w2"], ["x2", "y2", "z2"],
#  ["p3", "r3", "t3"], ["n3"]]

See docs for details on each tool ncycles, flatten and chucked.