Start with a yard and a quarter of fabric. You are going to want to find this light open weave cotton that had a lot of stretch in it.
Cut your piece 40 x 40 square.
Begin by sewing a basting stitch.
You will want to baste all four sides of the blanket.
Sew a rolled hem around all four sides.
Remove your baste stitch and voila swaddle blanket.
I wash mine after I sew, this fabric is a little temperamental and you will want the factory stiffness to help along in the process.