Double Counting Area?

Looking at the picture, We see 2 $3 \times 3$ squares, and 2 $2 \times 2$ squares.However, we notice that one $1 \times 1$ square overlaps. Thus, $- (1^2)$ . Then rearranging, we can arrange it to a $5 \times 5$ square. Thus justified.

Alternatively, simply do the calculations:

$= 2 \times 3^2 + 2 \times 2^2 - 2 \times \dfrac {1}{2} \\ = 2 \times (3^2+2^2 - \dfrac {1}{2}) \\ = 2 \times 12.5 = 25 = 5^2$