"Fly the flag" is an idiomatic expression, or turn of phrase, that can have different meanings. On one hand, it is used in a positive manner to describe someone who honors his or her country. Many people literally fly the flag as a means of support or wear clothing or use items that depict their national emblem. While it doesn’t always have to be used in the literal sense, it indicates a person who shows pride in his or her country.
There are many idioms around, but some of these terms can also have meanings that are very different from the way they sound. To fly the flag might sound like a good thing, and in some cases it is, but at other times it can be used as a bit of an insult as well. Many people find nationalism to be a negative quality, especially if it is extreme, and therefore the term can also be used in a negative manner.
“That guy is such a flag waver,” is generally meant to be insulting. It indicates that the person has an overactive sense of nationalism, or perhaps is even considered a blind follower. "Fly the flag" and other similar terms are frequently used to describe people who appear to others as if they believe that their own countries can do no wrong.
If a particular country were to do something that most people find unacceptable, such as invading the privacy of its citizens without cause, many people would be upset. If their own country did the same thing, some people might try to make excuses or look for ways to justify the action. Justifying or excusing such actions is seen by some as extreme nationalism and the term is often used in a derogatory manner to describe people who behave this way.
Another variation of the phrase "fly the flag" is “let your flag fly.” This expression, while it can be used to describe displaying a flag or showing pride in one’s country, generally means to show pride in regard to something that may not be particularly well-tolerated. This can include a number of different things from choices in music or clothing to choices in lifestyle or religion. It indicates being proud of who you are no matter what others might think.