At the end of the Qin Dynasty (221-206 B.C.), the states of Chu and Han fought for control of the country. Xiang Yu, the king of Chu, was besieged at Gaixia by the Han army led by Liu Bang. With little food and few soldiers, Xiang Yu was in a desperate situation. One night, the surrounding Han troops began singing Chu folk songs. Xiang Yu was astonished and said, "Has Liu Bang already conquered all of Chu? How can he have so many Chu people in his army?" He then fled with the remnants of his forces.
This idiom is used metaphorically to describe being in a helpless and critical situation, surrounded by enemies on all sides.