Flagging means someone is using a portion or app of their vote to remove that much from your post rewards.  

Flags are not always 100% power.  If someone makes $50 for a picture and someone thinks that is too much they can flag it for or only $10-20. Even trough they might own enough stake to take the post to $0.  They may feel it is worth something but not $50. 

On the other hand if someone posts garbage, spam, abusive content, the community and even a single person may feel it doesn’t deserve to be rewarded and it is flagged to zero.  Another person may come by and feel it is and upvote it past the flags.  

Flags and upvotes are the same thing, a disagreement on rewards, they just go in different directions.