"When Luna adops a flag, I would like it to be a cannon or, on field sable, crossed by bar sinister gules of our proudly ignoble lineage... a symbol for all fools so ridiculously impractical as to think they can fight city hall."
- Robert A. Heinlein, The Moon Is a Harsh Mistress
Personally, I could never muster a great fondness for the flag design Professor de la Paz proposed for the Free State of Luna; I'm not really sure why. I've only ever seen it realized once, somewhere out there online, of the one that's described in the final pages of the book - the one described as incorporating the lunar motto "TANSTAAFL!" along the bottom. That, right there, is something I don't agree with.
Not the sentiment, mind you - the presence of writing on the flag. It wouldn't be a problem if it was limited to science fiction, but in this case as in so many others, the genre reflects the world around it.
It was Surrey that put me on this line, actually. There's a "Welcome to Surrey" setup on the far side of the Pattullo Bridge, just so the people know they ain't in New Westminster anymore, and it has three flags flying - the provincial flag, the national flag, and a Surrey flag - though it doesn't appear to be, on further research, its own municipal flag. It has an interesting symbol with it, probably intended to represent a cityscape alongside grasslands, but right next to it in big letters: "SURREY."
I wish organizations wouldn't do this. Writing on a flag is, for me and quite a few other people, like nails on a chalkboard; personally, I feel that it defeats the purpose of a flag. They're supposed to be clear, identifiable markers of whatever authority's flying it. Unless it's something like a regimental banner, if you have to squint and read the flag in order to tell for sure whose it is, I think that's a pretty good reason for the designer to go back to the drawing board. It's something I noticed a great deal in the United States - they tend to fly a lot of flags in the States, including the flags of the states. Problem is that most state flags are nothing more than the state's seal, slapped on a flag. So not only do they look backwards when you're looking at them from the wrong direction, there's that writing thing again.
Sometimes you can get away with it, thanks to stylization. The flag of Ottawa is based around a stylized "O," and while Toronto's flag was desgined to reflect City Hall it's not hard to see a "T" in there as well. But compare that to, say, the flag that Rwanda used up to 2001 - just a tricolor with an "R" stamped in the middle. Not that tricolors don't have their own problems, but that's not something for today.
You want a lunar flag? I made one as part of the background material for Tranquility, the novel I cracked 50,000 words in as part of NaNo 2006. In that setting the Republic of Tranquility controlled the scattered lunar settlements, and was really the only organized power in existence. You might think that'd obviate the need for a flag, but some habits die hard. It don't need words.
I went the understated route here - a flag for a politically independent lunar state could arguably want to establish itself as "on its own," and depict itself as alone against space. If I was to redesign it, I'd likely incorporate a starfield; the sheer blackness does make it apt to be swallowed when the light is low.
What's important in flag design is clarity and, to put it bluntly, beauty. A flag should be nice to look at. When words go on to a flag, I feel like it goes against its nature. The image should stand on its own, say all that needs to be said. Sometimes it's better that words don't do the talking.