The poet, John Agard, uses striking imagery throughout which delineates the ways in which a flag is far more than just a 'piece of cloth'--he uses deliberate irony to underplay the significance of the flag. The poem is framed as a series of questions and answers. one voice, apparently innocent, asks 'what's that...?' while clearly referring to a flag. the answering voice says 'just a piece of cloth', but seems to give the cloth magical qualities as it describes the power that it has.
You should notice the three-line stanzas, which repeat not only the initial words each time (this is an effect called anaphora) but also repeat the structure over a series of lines--so that we have a series of verbs (fluttering, unfurling, rising, flying) and then a series of prepositions (in, from, over, across) and than a series of nouns (breeze, pole, tent, field). This effect is known as parison (you might remember it by thinking of comparison) and what it does is increase the build-up of tension as we wait for the final revelation of the significance of the flag.
The casual 'just a piece of cloth' is undercut by the dramatic words which end each stanza, words which seem to connote war and conflict. This is clearly moe than a piece of cloth if it can do such terrible things. There is a deliberate ambiguity in some of the images--the nation on 'its knees' might be kneeling in reverence or in surrender, the 'guts of men' may be bold becasue the men are metaphorically feeling courage, but the mention of the colloquial word 'guts' also has connotations of butchery and disembowellment. (you could even argue that the men have been disembowelled--their 'guts' are feeling bold because they are coming out of their body--though that's a fairly nasty reading--what do you think?) Similarly, the coward is 'dared' to 'relent' which is an odd juxtaposition of words--he is being dared not to be a coward? Or being dared to be merciful, which would be implicitly more cowardly from the point of view of the jingoistic flag-waver? interesting...
Agard likes to read his work aloud, and here it is clear that he is creating two different voices in the poem. One seems almost dreamy, using words like 'fluttering' which have an onomatopoeic effect (do you agree that the word 'fluttering' sounds like sometihg fluttering?) while one is harsher, using a semantic field that suggests warfare and aggression, with assertive verbs 'brings...to its knees...makes the guts of men...dares the coward'. The connection between the innocent 'fluttering' or 'unfurling' and these more powerful verbs is emphasised by the question-and-answer format and by the repetition of 'it's just a piece of cloth' in each central line. It could be suggested that the flag sounds like a bird or butterfly spreading its wings (fluttering, unfurling, rising, flying) which contrasts with the progression through humiliation and conflict to 'the blood you bleed' at the end of each stanza, something which emphasises the difference between the idea of the flag and the reality is what is done in its name.
The flag, it is ultimately made clear, is more important than the men who die under it--it will 'outlive the blood you bleed' and the final stanza finally repeats the title word, indicating the significance of 'just a piece of cloth', and answering the initial series of questions more clearly. The final link between the blinding of conscience and the flag makes it clear where Agard stands on this--he sees the flag as something which enables people to hide behind it, to pretend that they are not responsible for what they do.
You might compare this poem to 'next to of course god america i', which also examines the negative connotations of a certain type of patriotism, or 'The Right Word' which discusses the power words have in other contexts of conflict, or even compare it to 'The Charge of the Light Brigade' or 'Bayonet Charge' when discussing the power that flags, duty and loyalty to one's country have over people.