Double strand knitting problem

How-to Questions
1

I have been attempting to knit a pair of ballet flats. The pattern is from Interweave Presents Knitted gifts by Ann Budd p.107. I know how to double the yarn and cast on. The yarn is one color. My question is: do I knit the doubled stitch using the doubled yarn as if I am knitting with thick yarn or do I separate each stitch and knit with the doubled yarn or do I separate each stitch and knit with separate yarn as if I am using two colors? I am confused because I cast on less than I am supposed to be knitting. When I separate it and knit with doubled yarn, the work gets too long for my needles.

Here is the first couple lines of the pattern:

With two strands of brown held tog, CO 68 sts.
Row 1 (WS) K1, M1, K31, M1, [K1, M1] 4 times, M1, K1-75 sts
Row 2 (RS) Knit.
Row 3 K1, M1 K34, M1, [K1, M1] 4 times, k35, M1, K1-82

I am using size 5 needles.

Any advice would be appreciated. I have made socks and hats and have experience but this is new to me.
Thank you in advance!

2

Knit the doubled stitch with the two strands, so yes treat it as a thick yarn. The reason you knit more stitches then you casted on is because you are increasing the stitches in Row 1 & 3. M1 is the stitch increase, you can check out the free videos on this site for increases.