The Union Jack or Union Flag has its roots in 1603 when King James VI of Scotland also became King James I of England. In order for the King to show that he was doubly important, he combined the red cross of St George with the saltire of St Andrew, and adjusted the colours to be more pleasing to the eye.
The flag of Wales was never considered for incorporation into the flag. The historically recorded reason is that this was due to Wales being under control of Edward I of England, but the true reason is that the Flag of Wales (shown below) would have made the Union Jack look like something drawn by rebellious colour-blind teenagers.
The Union Jack as we know it today was created in 1801 with the union of Ireland. It also added the red saltire cross of St Patrick, combined with the white saltire of St Andrew.
The flag is correctly flown with the white bits on the top on the left hand side, and the red bits on top on the right hand side. Some people get rather grumpy when they see the flag being flown upside-down, but most of the population doesn't know or care the correct way to fly the flag.
There's been some debate as to the name "Union Jack", since a jack technically refers to a smaller flag flown on the front of a ship, and not a flag that's hoisted up a flagpole. The term "Union Flag" is considered more correct.
Despite no law ever being passed to make the Union Jack a national flag, it's still considered to be the flag of the United Kingdom of Great Britian and Northern Ireland (UKoGBaNI, or just "the UK"). It was first recognised in parliament as such in 1908. The Union Jack is technically a royal flag. Its use on naval vessels is much more highly regulated than its civilian uses.
The Union Jack is see as a canton (top-left corner) of many former colonies, including those in Australia and New Zealand.
Technical clue provided by Perl Training Australia
