This is an anti-war song. The term "I've seen all good people" is ALL the people, including the so-called enemy.
The line, "Don't surround yourself with yourself" refers to self-righteous behavior; "Move on back two squares" is a chess term meaning to retreat and rethink your position. The lyrics also refer to the queen, which is the most versatile and powerful chess piece. It talks about how news is captured for use by the queen, which uses forces to take control and manipulate troops against the enemy. War is like a game of chess.
In a Songfacts interview with Yes frontman Jon Anderson
, he explained: "The song is about initiation of yourself into the idea that there is more to life than war and fighting within religions and things like that. So when we were singing 'see all good people,' it's like, 'we can see you all in the audience because you're good people no matter what, and when you're with music you're enlightened, you're good, you're happy, you're excited.' And music is the kingpin of it all. It's not just Yes, it's music that brings people together like no other energy on such a level."