I know that the dihedral group $D_4$ is generated by two elements $\sigma$ and $\tau$ such that $\sigma^4=\tau^2=e$, and $\tau\sigma\tau^{-1}=\sigma^3$. This is essentially the group of eight elements $\{e,\sigma,\sigma^2,\sigma^3,\tau,\tau\sigma,\tau\sigma^2,\tau\sigma^3\}$.
Here, I am representing by $\sigma$ a rotation by $\pi/2$, and by $\tau$ a reflection about the horizontal axis, whence $\tau\sigma$ is a reflection about the vertical axis. Now, my question is the following: How are symmetries of the square defined by reflections along the two diagonals covered in the dihedral group? For $\tau=\tau\sigma^2$, and $\tau\sigma=\tau\sigma^3$ geometrically, and that exhausts all eight elements without covering the diagonal symmetries.
Any clarification is much appreciated.
Let's consider the following square with a $90^\circ$-rotation followed by a horizontal reflection : $$ \begin{array}{ccc} 1 & - & 2 \\ | & & | \\ 4 & - & 3 \end{array} \quad \overset{\sigma}\longrightarrow \quad \begin{array}{ccc} 2 & - & 3 \\ | & & | \\ 1 & - & 4 \end{array} \quad \overset{\tau}\longrightarrow \quad \begin{array}{ccc} 1 & - & 4 \\ | & & | \\ 2 & - & 3 \end{array} $$ One gets indeed a reflection through the left diagonal, which exchanges 2 and 4 but keeps 1 and 3 invariant; it is thus represented by the element $\tau\sigma$.