The town flag is a customizable feature in every Animal Crossing town in Animal Crossing: Wild World, Animal Crossing: City Folk and Animal Crossing: New Leaf. Any design in a player's inventory can be used as a town flag. The flag appears next to the Town Gate in Animal Crossing: Wild World and Animal Crossing: City Folk, and on the Town Hall in Animal Crossing: New Leaf. They also appear on the New Year's Eve countdown display in Animal Crossing: City Folk.
Any player can speak to Booker in the Town Gate and select 'Change flag.' They will be given the option to replace the design with a new one or switch designs with the current town flag.