When you have been working on a problem for a long time, and you are unable to find a solution, what is it that you normally do? Since you have not been able to make any progress, you go back to the beginning and start all over again. When you tell someone that you are ‘back to square one’, what you mean is that you’ve returned to the original starting point. In other words, you are going to begin all over again.
After three days of house hunting, I found one that I really liked. When I went to pay the advance the next morning, the landlord said that he had decided not to rent the house. So, it was back to square one.
According to some scholars, this expression was made popular by sports commentators of the BBC. Since football is a game that is difficult to follow on the radio, what some enterprising radio commentators did in the early 20th century was to divide the field into eight squares. The commentators informed the audience of what was happening on the field by telling them which square the ball was in. On the day of the game, most newspapers and sports magazines carried a drawing of the playing field with the squares clearly marked and numbered — this made it easy for listeners to follow the action. Square one was where the goalie stood. Others believe that the idiom has its origins in board games like Snakes and Ladders.