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I've found many definitions online of the term, which the OED says is "used in reference to a situation in which a group of people are engaged in self-destructive internal conflicts and mutual recriminations," but I haven't been able to find any discussion of its origin.

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    Pretty sure I heard "circular firing squad" in high school, in the 60.
    – Hot Licks
    Commented Dec 31, 2021 at 19:16
  • "Do not attempt to move or we'll be shooting ourselves."
    – Exal
    Commented Jan 1, 2022 at 6:05
  • While not an identical concept, when the ill-fated Jewish AD 70 revolt against the Romans failed, and the Romans were about to capture a group of soldiers, the ancient Jewish historian Josephus wrote that the soldiers (Josephus amongst them) formed a circle and killed each other (until only Josephus and another remained). en.wikipedia.org/wiki/Josephus_problem This is a rather famous historic event, and I speculate, without evidence, it may have contributed to the imagery of a circular firing squad.
    – Jamin Grey
    Commented Jan 1, 2022 at 22:49

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The idea, though not quite the exact term, appeared in Time magazine in 1972, as quoted in an Alabama newspaper:

After the calamity at the 1968 convention in Chicago, with street fighting upstaging floor fighting, the party decided on a reform movement that would bring more people into the nominating process.

The many primaries with a full platoon of candidates was one result of this reformation, with results best described by a one-liner in Time magazine:

'When reform-minded Democrats are told make up a firing squad they form a circle.'

-- "As O'Brien Sees It." Montgomery Advertiser, April 9, 1972, p4

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OED—"September 2020 draft addition" under circular:

circular firing squad n. originally and chiefly U.S. a group of people who are engaged in self-destructive internal conflicts and mutual recriminations; (also) a situation, event, etc., characterized by this kind of behaviour.

1973 Let. in Las Vegas (New Mexico) Optic 23 Mar. 2/1 It is imperative that if we do not integrate we must—at the least—synchronize our lives; otherwise we will form a circular firing squad in which members of the squad will kill all that is worthwhile within the circle as well as themselves in the cross-fire.

This letter in the Las Vegas Optic could be the first use in print, or at least close to it in time, given that the writer explains the expression. I haven't found anything earlier in Google Books.

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    In the late 70s, I repeatedly heard US kids exchange this joke as "Have you heard about the <targeted group> firing squad? All in a circle." Bit like the still current "How many <x> does it take to screw in a light bulb.".
    – Italian Philosopher
    Commented Dec 31, 2021 at 19:15
  • @ItalianPhilosophers4Monica Oh wow, I now remember that as one of many Polish jokes heard in grade school. This would be in the early 70's.
    – Owen Reynolds
    Commented Jan 1, 2022 at 3:01
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According to Etymonline:

The metaphoric circular firing squad is attested by 1990.

Actually its usage appears to have been in place at least from the ‘80s

From: City Problems The Annual Proceedings of the United States Conference of Mayors - 1983:

You can easily come away with the impression that our national drug policy is being formulated by a circular firing squad ....

From: Savings Institutions, Volume 109. United States League of Savings Institutions, 1988 :

…the private mortgage insurance business has been like a circular firing squad , ” says Maurice R. Greenberg , president and chief executive officer of American ...

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