Using B, CO 207 sts. Knit 3 rows. Beginning with Row 1 of st Slip st pattern, *work 4 rows each E, B, E, A, C, D, B, D, C, A; rep from *until blanket measures approx 40”. Using B. knit 3 rows. BO. ~~from the pattern.
The section STITCHES USED is telling you how to work the pattern stitches.
Under BLANKET, it's telling you to start with your Color B and cast on 207 sts, then knit for 3 rows (you'll have garter stitch). Change to your color E, work 4 rows of the pattern, then change to color B, work the next 4 rows, etc. HTH
No, I've not made it but I'm thinking I might. I'll mark the pattern to show me when to change to which color and then mark it off as each one is done. It's a cool pattern.