According to a 1946 article attributed to the Oregon Worsted Company, the thrifty women of early America would carefully save scraps of yarn and fiber unraveled from old sweaters and socks. As these scraps accumulated, they were crocheted into small squares; the colors combined on the whim of the craftsman. The squares were then sewn together to make a blanket which was both functional and colorful. Because grandma was no longer up for manual labor, she was often the one to sew the squares together, thus they became GRANNY SQUARES. Thanks to Yarnaholic Confessions!
From Wikipedia, the free encyclopedia
A granny square is a piece of square fabric produced in crochet by working in rounds from the center outward. Granny squares are traditionally handmade. They resemble coarse lace. Although there is no theoretical limit to the maximum size of a granny square, crocheters usually create multiple small squares (called "motifs") and assemble the pieces to make clothing,purses, Afghan blankets, and other household textiles.
Granny square apparel is a cyclical fashion that peaked in the 1970s. As Stitch 'n Bitch series author Debbie Stoller describes:
Although particular color and pattern schemes for granny squares change with time, this class of motif is a staple among crocheters. Multicolor granny squares are an effective way to use up small amounts of yarn left over from other projects and basic granny square motifs do not require advanced skills to execute.