In the mid-90’s, Magic had cemented its position on the card game market and was expanding to find new creatures and moves at every turn. Every new set brought would bring in lots of new people
One of these sets, Mirage, particularly wanted to push new boundaries. Led by Bill Rose, the team wanted to do something different. And by different we mean they wanted to make people happy. And by that we mean squirrels. No, really.
According to Mark Rosewater (who was on the set's development team), “I think it has to do with the idea of a powerful wizard overrunning his opponent with small, furry rodents. It makes me smile. And isn’t Magic supposed to be fun?”
When the card Waiting in the Weeds card came up, it had the art description of "dozens of small hungry critters scurry in the low undergrowth of the jungle. In this picture, we cannot tell what the critters are. We can only see the eyes." The team thought it would be funny if, rather than a cat or other small predator, it would be squirrels. You know, because it was fun.
Amazingly this got all the way to the art director. But then the artist, Susan Van Camp, asked to make a change. Instead of squirrels, cats became the main artwork, and thus the text was changed to make it spawn cats.
Upset at the change, the team made it their mission at Magic to make a squirrel card. While Unglued got a few and Weatherlight's Liege of the Hollows got a glimmer of attention, none of the core decks or expansions managed to really get squirrels in there. However, the team was still persistent, and when 1999’s Urza’s Legacy expansion came up, the went to Squirrel city.
Deranged Hermit came into play, flinging in squirrels left and right:
Others, like in Might of Oaks' artwork, also brought in some more, and throughout 2000 a few more squirrel cards appeared:
Then, the next year, the Odyssey expansion came out and put in standardized tokens. 3/3s were elephants and 2/2s were bears. And those 1/1 tokens? Squirrels of course.
As more and more cards putting in squirrel tokens were added, squirrels took over decks. Playing a few cards spawning squirrels would unleash a torrent of squirrels, and these decks started winning tournaments. By 2002, even Rosewater had to address the rise of the squirrels.
By this time Design and Creative began making more moves against the new powerful squirrel faction. According to designer Doug Beyer, it had become an embarrassment. It was too silly. They were “Hard to make cool." It was seen as a marketing issue. The best deck in standard at the time had squirrels solidly a part of it.
So, with a ‘squirrel-opposition’, they began being phased out in favor of more traditional fantasy monsters. By 2004 ,squirrels were back off in favor of more traditional 1/1 creatures thanks to the designers reacting against the backlash against the little animals. Even today, squirrel creatures and squirrel matters cards are few and far between in anything other than a silver border set.
Still, for a period in the early 2000s, many players feared cards with squirrels on them, a feat that only happened because one artist decided to put a few cats on a card.