Teabag folding is based on the ancient art of Origami to be more precise, modular Origami. The chosen fold is made several times using the required
number of patterned squares and then each fold slides into the other to produce a rosette with a kaleidoscopic effect.
They say necessity is the mother of invention, and so goes the origin of this colorful, delightful Origami spin-off. Teabag folding began when Tiny van der
Plas of Holland ran out of origami paper and needed to make a birthday card for her sister. As the legend goes, Tiny made herself a cup of fruit tea while she pondered the situation -- then her eye fell upon the gaily printed envelope that she had taken the teabag out of. She cut the front of it into a square, then emptied seven more envelopes, fitting them together in a circular fashion to form a rosette - thus, the art of teabag folding was born and the rest is history!
( from KWE - Thanks to Lynne Kaiser)