I think the song has to do with the way life is/was in South Africa. Lebo M is from South Africa and he was exiled. I'm sure some of you already know this. For a long time, there was/has been a severe divide between races in South Africa. Have any of you seen "The Color of Friendship"? It was on the DisneyChannel a few years ago and goes into it. I'm rubbish at explaining it. But Google it, and you should come up with some information.
As for TLKoB, One by One is used instead of an entre'act before Act II begins. Julie Taymor said she chose it because the repeated "one by one" made her picture what the audience would be doing as the song was being performed: Returning to their seats. One by one.