Make Paper Flags Droop

If these are printed on both sides of the paper, to be folded over the halyard, I use a 1:1 mix of white glue and water, glue the flag sides together, and then apply more of the mix so the paper is well saturated.  I can then wrinkle and drape the flag with whatever folds and sags I want and it will hold that shape when dry.

Making those folds realistic, in a flag of any size, is trickier than it looks at first glance.

I once had to do a series of drawings of ships with various flags flying from their masts. After getting frustrated with my attempts to make them look real, I finally took my camera to a flagpole on a nice, sunny, slightly breezy day and took a bunch of photos (at high shutter speed) of the flag as it drooped and blew around. I was a bit surprised at just what the shapes in the various shots turned out to be.