I want to make 1:1 ratio Instagram videos using Davinci Resolve. But I am unable to find how to change the aspect ratio to 1:1 using Davinci Resolve.
You can do this by going to File>Project Settings... Under the Master Settings tab on Timeline resolution choose Custom and change For 1920x1080 processing to For 1080x1080 processing.
I would try to make a 1080x1080 (1:1) and import your 1920x1080 footage (I'm assuming) and scale the footage to your liking. You either can use part of the footage (crop to fill 1:1), or fit the whole 1920x1080p video within the 1:1 ratio square (it will show black bars).
edit: look at this video for Davinci Resolve Image Scaling...
To change the scale of your video/images in the Edit Page, you'll need to open up the Inspector (top-right corner)