If still a little confused, once you sew the 12 1/2" block to the sashing or binding or another block, you have used 1/4" of the fabric on each side for the seam decreasing the fabric amount by 1/2" giving you a 12" finished block on two sides. Of course to make it 12" square finished, the other two sides have to be sewn to sashing, border, or another block to decrease the other 1/2" for the other two sides to square it up.
Now that you are totally confused... :roll: