No Sarah...you need one piece of fabric 7"square and you will stitch, paint etc a design in the middle of that piece of fabric. The design has to me a max of 5" square so there is a 'border' of 1" around it that will be used to stitch them together. When all the blocks have been stitched together they will be backed by wadding and fabric into a quilt.
Here is a link to some finished quilt I made a while back...substitute the embroidered squares for our blocks.
http://www.picturetrail.com/sylvialyth
scroll down to the SOLAK and FTS quilt albums.