If it is a square phalanx, if there are X people on each side, then there should be 4X-4 people on the outermost side, which means that the number of people on the outermost side should be a multiple of 4, but 26 is not, so it can't be a square phalanx.

Calculated as a rectangular square, there are m rows in the horizontal direction and n columns in the vertical direction, and there are 2(M+N)-4 on the outermost side, which is obtained from 2(M+N)-4=26, and M+N= 15.

The number of people is the largest when M and N are closest, so the number of people is the largest when m = 8 and n = 7, with 56 people.