Step 1: Relate the side of the square to the circle.
For the largest circle that can fit inside a square, the diameter of the circle is equal to the side length of the square. Hence,
\[
d = 7 \text{ cm}
\]
Step 2: Use the diameter directly in the area formula.
The area of a circle can also be written as:
\[
A=\frac{\pi d^2}{4}
\]
Substitute \(d=7\) cm:
\[
A=\frac{\pi(7)^2}{4}
=\frac{49\pi}{4}
=12.25\pi
\]
Step 3: Compute the final value.
Using \(\pi \approx 3.1416\),
\[
A=12.25\times3.1416\approx38.48\ \text{cm}^2
\]
Therefore, the maximum area of the inscribed circle is:
\[
\boxed{38.48\ \text{cm}^2}
\]