The Feel Good Claims
If one defines a flag as a cloth with a symbol representing a political or national entity, then Israel and the Philippines have the world's largest flags. In October 2007 a pro-Israel Filipino group made two giant flags representing the friendship between the two states. The flags were 202,823 square feet (18,843 meters squared). Instead of being nationalistic separators, these flags brought people together and gave hope for international cooperation.
The Angry, We Hate You Claim
There is; however, a larger national flag painted on a hillside. At approximately 805,400 square feet (74,824 meters squared) the flag of the Turkish Republic of Northern Cyprus overlooks the (southern, Greek) Cypriot capitol of Nicosia. It is viewable for miles around and the air. Also, just to rub in the hate a little bit more, the Turkish Cypriots light it up at night. While most of the world ignores Northern Cyprus, the Northern Cypriots ensure the southerners cannot.