The historical source for the witches' use of the Circle is undoubtedly the grimoire tradition, from which Gardner took so much. The Circle does, however encompass (literally) a whole philosophy and theology of witchcraft.
The Circle is essentially an expansion of a dot, which represents a centre, a place of happening, an event, a time. The expansion of this dot into the Circle can indicate the expansion of this microcosm to form a macrocosm; this is what we do when we change reality by doing one thing on one level which is intended to make that same change on all levels, or in all worlds.
The line around the Circle is a something containing the space inside which is a nothing, representing the creation of new things out of nothing. The centre and circumference can reference the quote that God/dess is a circle whose centre is everywhere and circumference is nowhere. So the Circle can represent divinity him/her/themself, and our working inside it reflects our co-creation with divinity of the reality around us.
'The women recall the story of the one who lived for a long time where the camels pass. Bareheaded beneath the sun,Clemence Maieul incessantly invokes Amaterasu the sun goddess, cutting her abundant hair, abasing herself three times on the ground which she strikes with her hands, saying, I salute you, great Amaterasu, in the name of our mother, in the name of those who are to come. Our kingdom come. May this order be destroyed. May the good and the evil be cast down. They say that Clemence Maieul often drew on the ground that O which is the sign of the goddess, symbol of the vulval ring.' (Monique Wittig: Les Guerilleres. Beacon Press, Boston, pp.26-27.)A more specific and literal reference from the shape of the Circle to the woman's vulva is found in Z Budapest:
"Once they smell a woman's circle, they never go back to the other way!" Flash Silvermoon: Dianic Wicca. http://lesbian-pride.com/flash.html, accessed 16.8.12.All points on the edge of the circle are an equal distance from the centre, which reflects the balance and right order that witches strive for in their lives and working. It is also a model of equality, over and against, say, the hierarchical structure of the mediaeval cathedral.
In Wicca a new use for the Circle which does not come from the grimoire tradition is as a container for the energy that is raised within it. It can also be a constraint for the witch herself, as in this Crowley quote:
The Circle announces the Nature of the Great Work.[...]
[The Magician] chooses a circle rather than any other lineal figure for many reasons; e.g.,
1. He affirms thereby his identity with the infinite.
2. He affirms the equal balance of his working; since all points on the circumference are equidistant from the centre.
3. He affirms the limitation implied by his devotion to the Great Work. He no longer wanders about aimlessly in the world.
(Aleister Crowley: Magick. Guild Publishing, London, 1986, p. 49.)
The endless 'path' around the edge of the circle can signify the unavoidable nature of our path: we are here to do something individual for each of us, and any attempt to avoid our necessary 'task' is doomed.By 'drawing' a circle around ourselves, we accept our task and consecrate ourselves to it, either for the period of that ritual or longer.
Of course the circle also references the image of the ouroboros, the snake eating its own tail, which Plato (in Timaeus 33) saw as the first creature:
The living being had no need of eyes because there was nothing outside of him to be seen; nor of ears because there was nothing to be heard; and there was no surrounding atmosphere to be breathed; nor would there have been any use of organs by the help of which he might receive his food or get rid of what he had already digested, since there was nothing which went from him or came into him: for there was nothing beside him. Of design he created thus; his own waste providing his own food, and all that he did or suffered taking place in and by himself. For the Creator conceived that a being which was self-sufficient would be far more excellent than one which lacked anything; and, as he had no need to take anything or defend himself against any one, the Creator did not think it necessary to bestow upon him hands: nor had he any need of feet, nor of the whole apparatus of walking; but the movement suited to his spherical form which was designed by him, being of all the seven that which is most appropriate to mind and intelligence; and he was made to move in the same manner and on the same spot, within his own limits revolving in a circle. All the other six motions were taken away from him, and he was made not to partake of their deviations. And as this circular movement required no feet, the universe was created without legs and without feet. SourceI would venture to say that we witches would tend to see the circle as something we must go along, rather than as something to escape from, as the alchemists saw the ouroboros snake: while it represented for them the eternal cycles of life and death, they sought escape from these cycles. I think we witches would have more of an ethic of rightness. Even Jung has got hold of the image of the ouroboros/circle, and made it a model for the theory of inidividuation:
The alchemists, who in their own way knew more about the nature of the individuation process than we moderns do, expressed this paradox through the symbol of the Ouroboros, the snake that eats its own tail. The Ouroboros has been said to have a meaning of infinity or wholeness. In the age-old image of the Ouroboros lies the thought of devouring oneself and turning oneself into a circulatory process, for it was clear to the more astute alchemists that the prima materia of the art was man himself. The Ouroboros is a dramatic symbol for the integration and assimilation of the opposite, i.e. of the shadow. This 'feed-back' process is at the same time a symbol of immortality, since it is said of the Ouroboros that he slays himself and brings himself to life, fertilizes himself and gives birth to himself. He symbolizes the One, who proceeds from the clash of opposites, and he therefore constitutes the secret of the prima materia which [...] unquestionably stems from man's unconscious. Source