Here are some facts about this history of the American flag and how the Flag Day observance came about:
It commemorates the adoption of the flag of the United States, which happened that day by resolution of the Second Continental Congress in 1777. The United States Army also celebrates the Army Birthday on this date.
In May of 1776, Betsy Ross reported that she sewed the first American flag.
On June 14, 1777, in order to establish an official flag for the new nation, the Continental Congress passed the first Flag Act: "Resolved, That the flag of the United States be made of thirteen stripes, alternate red and white; that the union be thirteen stars, white in a blue field, representing a new Constellation."
Between 1777 and 1960, Congress passed several acts that changed the shape, design and arrangement of the flag and allowed for additional stars and stripes to be added to reflect the admission of each new state.
** Act of January 13, 1794 - provided for 15 stripes and 15 stars after May 1795.
** Act of April 4, 1818 - provided for 13 stripes and one star for each state, to be added to the flag on the 4th of July following the admission of each new state, signed by President Monroe.
** Executive Order of President Taft dated June 24, 1912 - established proportions of the flag and provided for arrangement of the stars in six horizontal rows of eight each, a single point of each star to be upward.
** Executive Order of President Eisenhower dated January 3, 1959 - provided for the arrangement of the stars in seven rows of seven stars each, staggered horizontally and vertically.
** Executive Order of President Eisenhower dated August 21, 1959 - provided for the arrangement of the stars in nine rows of stars staggered horizontally and eleven rows of stars staggered vertically.
See flag rules and regulations
Flag Day - the anniversary of the Flag Resolution of 1777 - was officially established by the Proclamation of President Woodrow Wilson on May 30th, 1916. While Flag Day was celebrated in various communities for years after Wilson's proclamation, it was not until August 3rd, 1949, that President Truman signed an Act of Congress designating June 14th of each year as National Flag Day.
Today the flag consists of thirteen horizontal stripes, seven red alternating with 6 white. The stripes represent the original 13 colonies, the stars represent the 50 states of the Union. The colors of the flag are symbolic as well: Red symbolizes Hardiness and Valor, White symbolizes Purity and Innocence and Blue represents Vigilance, Perseverance and Justice.
(information provided by ushistory.org, wikipedia, and usflag.org)