The fianchetto is a staple of many "hypermodern" openings, whose philosophy is to delay direct occupation of the center with the plan of undermining and destroying the opponent's central outpost. It also regularly occurs in Indian defences, so-called since fianchettoing was the standard practice in chess as it was played in ancient India. The fianchetto is less common in open games (1.e4 e5,) but the King's bishop is sometimes fianchettoed by Black in the Spanish Game or by White in an uncommon variation of the Vienna Game.
One of the major benefits of the fianchetto is that it often allows the fianchettoed bishop to become more active. Because the bishop is placed on a long diagonal (either h1-a8 or a1-h8), it controls a lot of squares and can become a powerful offensive weapon. However, a fianchettoed position also presents some opportunities for the opposing player: if the fianchettoed bishop can be exchanged, the squares the bishop was formerly protecting will become weak and can form the basis of an attack (particularly if the fianchetto was performed on the king-side). Therefore, exchanging the fianchettoed bishop should not be done lightly, especially if the enemy bishop of the same colour is still on the board.
The diagram to the right shows three different sorts of fianchetto. White's king's bishop is in a regular fianchetto, with the knight-pawn advanced one square and the bishop occupying the long diagonal. This is by far the most common type of fianchetto, seen in the Sicilian Dragon, Pirc Defence, Benoni Defence, and Benko Opening among many others.
Black's queen's bishop is also fianchettoed, but the knight pawn has moved forward two squares, making this a long fianchetto. The b-pawn also controls the c4 square, which is often advantageous. If White plays the King's Indian Attack 1. Nf3 2. g3, Black may play a long queen's fianchetto to oppose White's bishop and make it more difficult for White to play a c4 pawn break. The long fianchetto on the kingside is more rarely played, because it weakens the pawn shield in front of the castled position, and controls a less important square. Nevertheless, Grob's attack 1.g4?! and the Borg defense 1. e4 g5?! — as in "reversed Grob" — are sometimes played by free spirits like International Master Michael Basman.
White's queen's bishop has moved out to a3 in what is sometimes called an extended fianchetto. Rather than control the long diagonal, it takes aim at Black's f8 square. If Black moves his e-pawn, White can play Bxf8, after which Black will have to waste time on artificial castling after recapturing with his king. This tactic is often seen in the Evans Gambit, and gives the Benko Gambit much of its bite. Black often plays Ba6 in the French Defence, and the Queen's Indian Defence if White plays g3 in order to fianchetto his own bishop (Aron Nimzowitsch's move against the Classical variation).