Monaco has been an independent principality since 1297 when it was acquired by the House of Grimaldi, and until 1860 was reckoned as part of Italy.
The Grimaldi arms are lozenges of white and red and have given rise to the flag colors. The shield is surrounded by the the collar of the order of St. Charles, supported by two armed monks and placed on a pavilion with a princely crown. The monks refer to the legend that the Grimaldi seized the fortress disguised as monks.
Earlier flags often had the crowned shield on a white field, but the present design was laid down by Prince Charles the 3rd in 1881, some on hundred and thirty years ago.
This flag is in practice made up in the proportions 2:3, thus making it identical with that of Indonesia!