The flag of Ponychan was created by its users. There were many suggestions, but the flag that was chosen was picked almost unanimously.
Ponychan's flag is based off of that of the Marshall Islands. The colours used on the flag come directly from Ponychan's "Colgate" theme, the default theme of the site. The sun in the upper-left corner is the cutie mark of Princess Celestia, a character from My Little Pony: Friendship is Magic. The cutie mark itself serves as the symbol of Ponychan due to its founder, Orange Blaze, taking on the nom de plume "!!Celestia".