The key here, I think, in making a good flag for your army is to find the right material. It has to be a paper good enough to take paint and glue and still be supple enough to bend and furl into a nice wind-blown shape.
The material I use, and have plenty of, comes from the inserts Wargames Foundry usually sends out with their orders. I have also found, most thick, glossy papers will work. Really, just about any paper will work; If you paint the entire square/retangle of paper with acrylic paint, the paint will essentially provide the paper with a plastic layer giving your base material a layer of strength.
I prefer to measure and cut out a shape twice as long as the flag, so that I can fold it around a pole. In this case, I cut out flags at 2 inches by 4 inches (to make flags roughly 2-inches square). Don't forget to account for the part of the flag you'll wrap around the pole. For glue, I use superglue ( I like my stuff to get done fast), but white glue works just fine.
A note on flag wrinkles (see image): Flag folds/wrinkles/waves are the conjunction of where the wind is blowing the flag from one direction and gravity is pulling in another direction. But you need a point of tension from the which the wrinkle pulls, and that is the top of the flagpole where the corner of the flag holds.
Except where there are high, irregular or crosswinds, you should keep your wrinkles in a diagonal direction pointing roughly toward the tension point. You should also keep the wrinkles roughly parallel to one another though some wrinkles may slighlty branch away from larger wrinkles.
However, wrinkles are not always required- you may add a very subtle wave or none at all if you want folks to admire your handywork. I want folks to see the patterns on my flags, so I've added only a minimal of waves into them.
A note on my flags' design choice: For my Warhammer Empire army, I chose to base my flag designs off the Bedford Flag (see bottom image) from the American Revolution. The Bedford flag is considered the oldest flag of the Revolution and was even old than the Rebvolution, itself. The flag originally was a cavalry flag for the Massachusett's Bay militia during the French and Indian War.
The image is a photo of an actual-size reproduction Bedford Flag I made. The original flag was only 27 inches by 29 inches. The flags in my Empire army, however are about 6-foot square (inscale that is); I wanted them to have a decent impact on the game board.