This alludes to the country's name in Dzongkha: འབྲུག་ཡུལ་ Druk Yul, meaning 'The Thunder Dragon Kingdom', as well as the Drukpa Lineage of Tibetan Buddhism—the dominant religion of Bhutan.

Centred along the dividing line is a large black and white dragon facing away from the hoist side.

[2][3] The following sizes have been declared standard by the Government of Bhutan:[4] According to The Legal Provisions of the National Flag of the Kingdom of Palden Drukpa as Endorsed in Resolution 28 of the 36th Session of the National Assembly held on 8 June 1972, and as restated in the Constitution of 2008, the yellow signifies civil tradition and temporal authority as embodied in the Druk Gyalpo, the Dragon King of Bhutan, whose royal garb traditionally includes a yellow kabney (scarf).

The dragon's white colour signifies the purity of inner thoughts and deeds that unite all the ethnically and linguistically diverse peoples of Bhutan.

The CBS document states that the first national flag was designed upon the request of Jigme Wangchuck, the second Druk Gyalpo of the 20th-century Kingdom of Bhutan, and was introduced in 1949 during the signing of the Indo-Bhutan Treaty.

In the centre of the flag, at the convergence of the yellow and red fields, is a green Druk, located parallel to the bottom edge and facing the fly.

[12][13][14][15] The second version of the national flag was developed in 1956 for the visit of the third Druk Gyalpo Jigme Dorji Wangchuk to eastern Bhutan.

The retinue of the Druk Gyalpo included a convoy consisting of over one hundred ponies; a small version of the flag was placed on the saddle of every tenth pony, and a large flag approximately 6 square feet (0.56 m2) in size was flown in the camp every evening, hoisted to the sound of a bugle.

[4] Beginning in the late 1950s, Dasho Shingkhar Lam, former Secretary to His Majesty King Jigme Dorji Wangchuck and Sixth Speaker of the National Assembly (1971–74), was requested by the king to make several modifications to the flag; he is responsible for its current design,[16] which has remained unchanged since 1969.

[4] In another change, the dragon, which had formerly been placed in a roughly horizontal position in the centre of the flag, was repositioned to spread out over the diagonal dividing line between the background colours.

Bhutanese artist Kilkhor Lopen Jada painted a new design for the druk in which the curves of the dragon's body are relaxed to create a somewhat longer and more gently undulating shape.

[4] The CBS document states that the king ordered the colour of the lower half changed from red to orange "sometime in 1968 or 69.

[3] The tradition of flying the national flag in front of government offices had not existed in Bhutan prior to 1968 but was decreed standard practice by the Druk Gyalpo after his Secretariat was moved from the city of Taba to Tashichho Dzong in that year.