Well, what does any representation or symbol actually stand for? A symbol can have many varied and contested meanings; even if they are created with particular meanings in mind, the way people relate to and engage with different symbols can transform and alter their shared cultural meaning. Consider what is perhaps the most famous example of a symbol undergoing a profound change in cultural meaning: the swastika. It is an ancient cultural and religious symbol that is still used with normality and positive significance in many parts of the world - in the western world, there was a time when it's use as a decorative icon was perfectly legitimate. In the modern western world however, we immediately associate the swastika with its use by the German Nazi party and similar far right movements; it is a thoroughly stigmatised symbol that no-one would seriously consider using as decorative iconography today. The meanings of symbols are not fixed in stone, nor are they unilaterally determined by their creator; they are negotiated and contested. It arguably matters very little if the general public look at a symbol in a way that fundamentally contradicts the intentions of the person creating or employing that symbol - if you want to understand the significance of a symbolic representation to a society, then it is the response to that representation that matters most.

The Civil War was a conflict born out of tensions surrounding African slavery, and it was a war very much fought over the future of that institutions. Certainly, there are complexities that colour that understanding, and it would be erroneous to not acknowledge those complexities - but at its core the Civil War was about slave-holding states violently resisting what they feared was the forthcoming abolition of slavery. Other factors are very much ancillary to this fact; arguments that the war was about state's rights, for example, selectively ignore that antebellum Southern leadership saw the federal government's role as being defending and upholding the institution of slavery as a national institution. The Fugitive Slave Act of 1850 was very much an assault on the rights of states to legislate for their own social order, giving slavery a firm presence even in states opposed to it - it was conceived explicitly in response to efforts by free states to undermine existing federal legislation. Secession documents explicitly hold up slavery was the motivation for leaving the union: when Mississippi seceded for example, its declaration even stated that "our position is thoroughly identified with the institution of slavery". It is only as it becomes apparent the Civil War is lost that the Southern elite begins to earnestly reframe their struggle in other, less sinister terms.

To millions of people in the United States then, the symbolism of the Confederacy is permanently and undeniably caught up in the story of slavery. To many African Americans - and to many other people, marginalised or not - the use of Confederate flags (which /u/bjbarlowe has discussed the specificities of) invokes memories not only of a time when it was possible for a white person to own and degrade a black person based on the colour of their skin, and the legacy of that time as expressed in the surviving institutions of racism, both legal (like anti-miscegenation and segregation) and cultural (prevailing racial prejudice). The Confederacy was created in the pursuit of a thoroughly racist agenda, committed to not only the survival but the prosperity and expansion of the institutions of racial slavery. Its symbols and representations cannot neatly be separated from that context because slavery is intrinsic to the history of the confederacy, and the legacy of slavery continues to reverberate through American society today.

That is not to say that those who look to the Confederate flag as a symbol of Southern pride and resilience are inherently or inevitably racist. As I have said, symbolic representations have fluid and contested meanings, and there are perhaps somewhat legitimate ways in which people can look to Confederate symbology in a way that they do not intend to invoke ideas of racial prejudice. But to deny the meanings implicit in those symbols, as intimately connected to the histories of slavery and racial oppression that they are, is a distortion of the historical record that serves to reproduce those systems of oppression. Representing the Confederate flag as it is popularised today as a symbol free of connotations of racial prejudice or the legacy of slavery is to construct an historical narrative that excludes the experiences of African American people, and denies the legitimacy of their experiences. An essential part of being an included, equal member of a society is to be able contribute to the formation of that society's history.

Those who hold Confederate symbology up as an icon fundamentally tainted by the legacy of slavery are essentially trying to re-inscribe the experiences of African Americans into the historical narrative where they have previously been obscured or erased by elites (and it should be noted, arguably, that this is also an attempt to re-inscribe the history of some marginalised white working class people into the narrative as well). Whatever their intentions, those who hold up Confederate symbols as sanctified icons of Southern spirit are speaking only to the experiences and histories of one historically powerful and privileged section of society, and implicitly excluding the experiences of marginalised persons.

For our part, historians today try very carefully to produce works of history that are inclusive of as many experiences and interests as possible, both elite and marginalised. We try not to advantage any particular experience in the historical record in so much as we try to bring diverse experiences clearly into focus alongside one another, and understand them in their proper context - the nature of the historical record, where those who are powerful can leave behind footprints that are much more abundant and obvious than those who are not, means that much more attention must be paid to the marginalised, in order to try and bring to the fore experiences and voices that are not obvious from a superficial glance at the past.

The Confederate flag that we think of today was not the national flag of the Confederate States of America ("The Stars and Bars"), but the battle emblem of the Army of Virginia. Presumably, the reason why the national Confederate flag was not flown in battle was because it was very similar to the Union national flag ("The Star Spangled Banner"). Since armies especially at the beginning of the war were still fighting in open battlefields, battle banners were very important for rallying troops. So there would be obvious problems on both sides if they looked the same.

Army banners tended to evoke deep emotions among the soldiers who fought under them. The loss of the war and subsequent military occupation under Reconstruction deeply hurt and embittered many former Confederate soldiers, and the Confederate battle flag was a natural symbol to channel their feelings of bitterness and nostalgia. These emotions were passed through generations and at some point, the Confederate battle flag that we call the Confederate flag today became a symbol of the Confederacy itself.

What I think we are seeing today in the conflict over the Confederate flag is part of a larger conflict over how the American people should interpret the Civil War. On one side, we have the Lost Cause interpretation, which became popular in the 1890s and was dominant for several decades. This interpretation deemphasized the role of slavery in the conflict, portrayed the antebellum South as a happy and peaceful society, and imbued a sense of nobility in Southern soldiers, who, it says, fought for a cause they believed in. This is what people are thinking of when they discuss "southern heritage" as it relates to the Confederate flag.

On the other side, we have an interpretation of the Civil War as a tragic, but inevitable conflict between two societies in one nation that were more or less incompatible with one another. Whatever role "states' rights" and Federalism played in the politics of the sectional crisis, the core of the conflict was around slavery. The South was defeated and with it came the end of slavery. To those who recognize the indignity of slavery and the oppression that the South continued against black Americans even after the war, the Confederate flag does not represent a romantic antebellum southern society, but an unjust and indeed racist society.

So the question isn't really over whether the Confederate flag represents "southern pride" or racism. It represents both to different groups of people. The question is really about what we should focus on when we evaluate antebellum southern culture.

While I don't agree with all of its conclusions you might look into The Confederate Battle Flag: America's Most Embattled Emblem by John M. Coski, and I'm going to cite him throughout.

To start off with there was more than one Confederate flag. What we usually consider "the" Confederate flag, the "Battle Flag of the Confederacy" (blue saltire cross, trimmed in white, with thirteen stars, on a field of red) was not the original or official national flag of the CSA, although it was incorporated into it on May 1, 1863.

The history is a bit complicated; designs for a potential flag were already being made in 1860 during the secession conventions, and the saltire cross design was proposed by William Miles, but not initially accepted. (Coski 5-6) After First Manassas, it was determined that the CSA national flag (the "Stars and Bars") was too close to the Union flag (the "Stars and Stripes") and could be confused in combat, so a battle flag was needed. Gen. Beauregard approached Miles, who suggested his pet design, and though the Confederate Congressional committee voted against it, Beauregard persisted:

I wrote to [Miles] that we should have two flags--a peace or parade flag, and a war flag to be used only on the field of battle--but congress having adjourned no action will be taken on the matter--How would it do for us to address the War Dept. on the subject for a supply of Regimental or badge flags made of red with two blue bars crossing each other diagonally on which shall be introduced the stars, the edge of the flag to be trimmed all around with white, yellow or gold fringe? We would then on the field of battle know our friends from our Enemies.

Source: The Military Operations of Gen. Beauregard in the War Between the States, Vol 1 (quoted from Coski 9)

This is the basic design of the battle flag which would be adopted by Army of Northern Virginia, and would from then on grow to be a symbol of the Confederacy. In particular, in 1863 the Confederate Navy switched to a navy jack and navy ensign virtually identical to the flag of the Army of Northern Virginia (minus the gold fringe), and the second national flag of the Confederacy (the "Stainless Banner") incorporated it as inset in the upper-left corner on a white field. (Coski 17-18) Probably the use of the flag as a symbol for the Confederacy was cemented when the United Confederate Veterans copyrighted the image for their use in 1907 - or possibly earlier, that's the earliest reference I'm aware of.

That is the highly abbreviated history of "how it came about." As to what it stands for... Miles initially argued that the saltire cross stood for the heraldic virtues of "strength and progress" (Coski 5); the stars represent the states of the CSA, much as the stars on the Union flag, the thirteenth star was added in 1862 after the CSA invaded Kentucky. (Source: "A Concise History of the Flags of the Confederate States of America and the Sovereign State of Georgia" by Richard Irby ). I've yet to find a satisfactory explanation of the symbolism of the colors, if they differentiate in any way substantially from the red, white, and blue of the Union Stars & Stripes, although some sources of the "Stainless Banner" state:

According to the editors of the Savannah Daily Morning News, the flag's whiteness carried another symbolic significance. "As a people, we are fighting to maintain the Heaven ordained supremacy of the white man over the inferior or colored race," the paper reasoned. "A white flag would thus be emblematic of our cause." (Coski 17-18)

Which of course brings us to contemporary interpretations. The "Confederate Flag" - which covers a number of similar designs of the blue cross on the red field, with white stars, in various proportions - was adopted as part of the general symbolism of the Confederacy from 1863 onwards, and continued to be associated with the Confederate States of America after the Civil War by groups like the United Confederate Veterans, and the United Daughters of the Confederacy; it was incorporated in part into various state flags, including Georgia, Mississippi, and the governor of Alabama, &c. You can dicker as to the exact reasons why; a large part of it was probably to keep a symbol of Southern heritage as part of the state flag, but the Mississippi code describing the flag specifies:

One with width two-thirds of its length, with the union square in width, two-thirds of the width of the flag; the ground of the union to be red and a broad blue saltier thereon bordered with white and emblazoned with thirteen (13) mullets or five-pointed stars, corresponding to the number of the original States of the Union [...]

So while obviously inspired by the battle flag of the Army of Northern Virginia, it explicitly references the original 13 colonies. It's probably worth noting that the state flag of Mississippi wasn't adopted 1894, some thirty years after the Civil War.

More generally, the "Confederate Flag" is taken as (and used as) a symbol of the Confederacy and what it represents - which differs depending on who is looking at it. Some see it as a symbol of white racism and rebellion (Coski 207), others as a symbol of their historical heritage (Coski 291). Both views are fair. The CSA is a part of Southern heritage, but it is a heritage of rebellion that was in large part fueled by chattel slavery (we can argue the fine points as to the origins of the Civil War in some other thread), and the Confederate Army and Navy, who adopted the battle flag and carried and displayed it, were fighting in rebellion on behalf of a government which had as one of its basic purposes the preservation of the institution of slavery.

One thing I haven't yet seen mentioned is the Confederate flag in the 20th century civil rights era. So I have a split-off question. I'd like to ask about that when it comes to current perceptions of the flag. Of course, the Civil War centennial time was during a time when much was happening in terms of civil rights and I imagine both sides used that anniversary to promote their own causes. How was the Army of Virginia battle emblem used in that context, and how much is that the determiner for perception of what it today symbolizes.

Further on after that, there's Dukes of Hazard and how that represented perception of the time or even influenced it. And so on.

Really, how has the flag been used in the 20th century and how does that effect "what it stands for"? There's what it stood for in 1865, 1885, 1925, 1965, and 1995, and I'd be interested in anyone that has a summary of changing and static perceptions of people and causes it has been used in support of.

Something that's very important to note: the modern Confederate flag was never the actual Confederate flag.

Here's the original flag design.

The second flag.

The third and final flag, adopted shortly before the surrender.