What is flag or trust flag?
It's relatively a new feature which was added recently to improve the trust/feedback system. Before we had three options on the feedback page of a user:
# Positive
# Neutral
# Negative
And now, once you go to someone's trust page, next to the Negative feedback option you will see a small clickable text which says, "add a flag"
Once you click there then you will see three options (three types of flags) and all of them are self explained.
Chose one and click Next button
And then follow the instruction on the new page before hitting the Confirm button. It's not a big deal.
Read more about this trust flag system here: https://bitcointalksearch.org/topic/trust-flags-5153344
I hope this short guide helps.
Thank you.