The current Flag of Tuvalu was instated when the country became independent in 1978. Like many former and current British dependencies, the Tuvaluan flag is based on the Union Flag, which is shown in the upper left canton of the flag.
The stars represent the 9 islands of which Tuvalu is made up; the arrangement is geographically correct when the flag is hung from the hoist down.
In 1995 the flag was replaced with a new one which was not based on the British flag, and also represented the islands with stars. This flag, however, was not liked by the inhabitants, and the old flag was re-instated in 1997, with some minor changes.