/**
 * Rectangle Toggle (v2.60)
 * by  szaboa1 (2013/Apr)
 * mod GoToLoop
 *
 * http://forum.processing.org/topic/problem-with-my-rectangle-class
 *
 * http://forum.processing.org/topic/draggable-balls-to-any-cell
 *
 * http://forum.processing.org/topic/
 * how-to-change-the-colour-of-an-objec-in-an-2d-arrayt-permanently
 *
 * http://forum.processing.org/topic/what-s-wrong-with-this-two-dimension-array
 *
 * http://studio.processingtogether.com/sp/pad/export/ro.9ABG0RKl9D2Bx/latest
 */

final static short GRID = 8, MARGIN = 25, GAP = 15, LEN = Square.DIM + GAP;
final static Square[][] boxes = new Square[GRID][GRID];

final static String GFX = JAVA2D; // Use JAVA2D or P2D

void setup() {
  size(GRID*LEN + MARGIN*2 - GAP, GRID*LEN + MARGIN*2 - GAP, GFX);
  noLoop();
  background(0100);

  for (int row=0; row!=GRID; ++row)  for (int col=0; col!=GRID; ++col)
    boxes[row][col] = new Square(col*LEN + MARGIN, row*LEN + MARGIN);
}

void draw() {
  for (int row=0; row!=GRID; ++row)  for (int col=0; col!=GRID;)
    boxes[row][col++].display();
}

void mousePressed() {
  final int c = mouseX / (LEN + MARGIN), r = mouseY / (LEN + MARGIN);

  for (int row=r; row!=GRID; ++row)  for (int col=c; col!=GRID; ++col)
    if ( boxes[row][col].wasClicked() ) {
      println( col + "," + row + " : " + boxes[row][col].toggle() );
      redraw();
      return;
    }
}

final class Square {
  final short x, y, xw, yh;
  boolean isSelected;

  final static short DIM = 60;
  final static color COLOR_ON = #90D0F0, COLOR_OFF = #407090;

  Square(int xx, int yy) {
    x = (short) xx;
    y = (short) yy;

    xw = (short) (x+DIM);
    yh = (short) (y+DIM);
  }

  boolean toggle() {
    return isSelected = !isSelected;
  }

  boolean wasClicked() {
    return mouseX > x & mouseX < xw & mouseY > y & mouseY < yh;
  }

  void display() {
    fill(isSelected? COLOR_ON : COLOR_OFF);
    rect(x, y, DIM, DIM);
  }
}

The problem would appear to be in the double loop at line 12 where you set number = 0 then use this value to create the squares, so they are all in the same position- try changing it to

1.   int number=0;
2.   for(int i=0;i<maxX;i++){
3.     for(int j=0;j<maxY;j++){
4.       squares[i][j]= new Square(number,number,100,100,100);
5.       number+=n;
6.     }
7.   }