The first problem is that you carried out the algebra incorrectly. When you complete the square with $x^2-2x$ you should get $(x-1)^2-1$, which you can verify by multiplying it out. Similarly, $y^2-2y=(y-1)^2-1$. Thus, $\begin{align*}x^2+y^2-2x-2y+1&=(x-1)^2-1+(y-1)^2-1+1\\ &=(x-1)^2+(y-1)^2-1\;, \end{align*}$
and the points where $x^2+y^2-2x-2y+1=0$ are the points where $(x-1)^2+(y-1)^2-1$, i.e., where $(x-1)^2+(y-1)^2=1$.
What’s the distance between the points $(x,y)$ and $(1,1)$? It’s $\sqrt{(x-1)^2+(y-1)^2}$, right? And if $(x-1)^2+(y-1)^2=1$, then $\sqrt{(x-1)^2+(y-1)^2}=\sqrt1=1$, so your set contains the points whose distance from $(1,1)$ is $1$. What does that set of points look like?