Why so many flags?
The early history of the Stars and Stripes is obscure. Its first use on land was probably sometime in 1777. Nevertheless, the land forces did not usually carry the Stars and Stripes, but used their own local, or regimental flags.
Colonial Troops were accustomed to using their regimental colors during and after the Revolutionary War instead of a national flag, thereby creating a very unique array. The Revolution was fought with relatively little central direction or organization and as a result most of the troops felt their loyalties belonged chiefly to the district from which they hailed.
General Washington quickly began to turn raw recruits into a trained army. His job was especially difficult because soldiers from different colonies mistrusted one another. "Connecticut wants no Massachusetts men in her corps," he wrote. And "Massachusetts thinks there is no necessity for a Rhode Islander to be introduced into her [ranks]." However, Washington won the loyalty of his troops. They, in turn, learned to take orders and work together.
Consequently, the Revolution gave rise to a large number of flags, most of which had naval or military associations. Except at forts, headquarters, and other buildings, the Army did not use the national flag in battle until the 1800's.
Link to Flags of the World web site for detailed information on Revolutionary flags.
* Prentice Hall Social Studies 7th grade Text Book - "The American Nation" - P 171, 2002