The first thing done is factor out an "X": Y= (G
-1+ aX
2)X. The next thing done was convert to a recursive form by treating the separate "X"s as if they were different terms in a sequence: Y
i+1= (G
-1+ aX
i2)X
i+1. Given a starting value, X
1, you could then calculate a sequence of "Y"s.
If that sequence convertes, then

will satisfy that equation:

and, since "X
i" and "X
i+1" refer to the same sequence they both converge to the same limit, X.