A means of self-identification. What image appears on the flag, and what does it say about your true self?
Battered flags indicate some type of war being waged, often on an emotional level. Raising flags represents honor and remembrance of traditions.
Flags flying at half-mast represent a literal or figurative death, or some type of memorial. This can be circumstantial too, like the death of a relationship, or the ending of a job.
Allegiance and devotion. In what condition does the flag appear? If torn in two, this can represent divided loyalty or a conflict of interest. Also note the country, state, or city the flag represents for more insight.... The Language of Dreams
There are different interpretations of this omen in various parts of the world, so it is better to ignore it and study instead the other indications in your dream. Some people consider that the generous display of coloured bunting is a fortunate omen. But all colours are not propitious, so this point is doubtful.
For instance (see COLOURS), Red is generally considered a warning of quarrels with friends, while Black is ominous. There should be plenty of White, Blue, Orange, or Green, if the bunting is to bring good luck.... Mystic Dream Book