The flag of Spain in its current form was adopted on December 19, 1981. It is also seen in a 'civil' variant without the coat of arms. The flag is similar to those used between 1785 and 1931 as the War Ensign and for other purposes.
History
The closest variant of the current flag of Spain can be traced back to 1785 under Carlos III of Spain. The kingdom, by then under the house of Bourbon, sought a flag that would distinguish itself from the Bourbon royal banners from the two other principal Bourbon kingdoms, France and the Two Sicilies.
Allegedly, there was a contest to design the new flag. Ultimately, the flag that was chosen as War Ensign is the direct ancestor of the current flag. It was a triband red-yellow-red, of which the yellow band was twice the width of the red bands, a unique feature that distinguished the Spanish tribanded flag from other tribanded European flags. The flag chosen as Civil Ensign, meanwhile, consisted of five stripes of yellow-red-yellow-red-yellow, in proportions 1:1:2:1:1.
The origin of the colors is a source of controversy. One of the popular theories is that this scheme is based on the heraldic schemes of the various Spanish kingdoms, notably Aragon (note the red and yellow that characterizes the Aragonese and Catalan flags). Others claim it was Naples flag adopted by Carlos III.
Throughout the 18th, 19th, and 20th centuries, this color scheme remained largely intact. The main changes to the flag centered on the coat of arms. In the modern flag, the coat of arms are greatly simplified as compared to previous variants. Each of the four quadrants represent one of the four kingdoms that were merged to form a unified Spain at the end of the 15th century. Namely, the kingdoms are: Castile, represented by the castle, León, represented by the lion, Aragon, represented by the vertical alternating red and yellow stripes (four red stripes, five yellow stripes), and Navarre, represented by the linked chains. Also the moorish kingdom of Granada is represented by the pomegranate fruit in the bottom of the coat of arms. The two columns with the "plus ultra" ensign (meaning "further" in latin) represent Spanish discovery and colonization of America, the columns being the mythological 'Hercules Columns' (of the Strait of Gibraltar, gateway to the Atlantic Ocean).
The purple band on the flag of the Second Spanish Republic is due to the flag of Castile having a purple variant as well as a red one. The royalist flag used red-yellow-red (the red-yellow for Aragon and the red for Castile), while the republican one used red-yellow for Aragon and purple for Castile.