Doesnt a fianchettoed bishop strip away the best square for the knight

If you put the knight in front of the fianchettoed bishop wont it reduce the mobility of the fianchettoed bishop

Well the knight will move earlier or later and bishop can stay at his square for a much longer time

but doesnt that make the bishop less active for that period of time

Yes, but there's always the threat of a potential discovered attack and if you castle the same side you fianchetto on your king is almost inpregnable.

yeah now that i realise it,is that the same logic behind the KID

The problem with "making a bishop active"... at c4 or b5, for example... is that it can be exchanged off fairly easily. At g2 it is harder for the opponent to exchange the Bishop (without investing a lot of time in the process) so it is more likely to play a major role in the game.

By fianchettoing the Bishop, you are trading some short-term activity for some long-term activity.

you will move your knight eventually leaving a good diagonal for the bishop but remember avoid trading fianchettoed bishop because by trading it you will weaken your kings safety

Exactly, it blocks the bishop, remove the knight as soon as possible. The main thing is not his mobility, but his range, the fianchettoed bishop's idea is to threaten from the distance, control the center from the distance.

thanks for the tips.And is it good to fianchetto a good bishop and place the bad bishop on c4 preparing to exchange?

Most players are puzzled by the KID until they get reasonably strong.  For the reason you mention but more particularly because the bishop at g7 is normally blocked by blacks own pawn on e5.  The bishop remains potentially strong, if the center opens or influencing important squared from behind the scenes, as it were.

IMO this fianchettoed bishop remains dormant for a long time in the game. For a long time, it plays only a defensive role not an offensive role. In the end game it becomes more active and may become a dominant piece. So when you fianchetto, you have the end game in mind. So its good for end game players but not for more attacking or aggressive players.

Thanks for the helpful advice

So a fianchettoed bishop will remain in the game for longer as opposed to a normal bishop?

ROFL! Nice one

Actually, it depends on the specific opening where it is used. For eg., in KIA it usually becomes active only in the end game. In Grunfeld for eg., the knight is often exchanged at the beginning of the game itself so it does not block the bishop. Fianchetto is by itself and in general is not the best way to develop the bishop, however, when it fits into a particular theme of a specific opening with some idea in mind it can be employed. 

And if you don't want the knight blocking it, you can always develop your knight to d2/e2.

what about in the KID

Bishop is reserved for future attacks. It could open up whenever it wants (at the right time) 

no, a knight on f3/6 or c3/6 strips away the best diagonal for a bishop

 Solution to the system. May hinder other bishop though...