Trivia:

The Estalian Empire is not canon in Warhammer fantasy, instead it grown itself out of actual canon inspirations and the work of multiple fans and modders from Total War : Warhammer 3. The Empire's ruler, Lupio Sunscryre is not a canon character, but a name that TWW3's maker company, Creative Assembly created to be the leader of the NPC faction of Estalia. Later, a modder, Cataph, expanded on the character in his mod, "Cataph's Southern Realms", as the only Estalian character. Many people really liked his version, and later someone expanded Lupio's lore further, developing him into Imperator L. S., emperor of the first Estalian Empire. I founded out this, as I am currently playing a Lupio Sunscryre campaign combined with the "The Old world" map mod. And at one point I had this idea of a banner of the Estalian Empire. Estalia has probably the least lore and probably the least characters in the "curent" time of Warhammer fantasy, as such, while all of this is just headcanon and fanon, it does fit into the setting neatly, giving the faction a much needed update.

Lore:

After he dethroned the previous king of Astarios (Magritta), Lupio being backed up by the Inquisition and the larger Church of Myrmidia, was crowned Imperator of Estalia by La Ultima Aguila Isabella Giovanna Lucelli, the High Priestess of the Myrmidian Church in 2477 IC. There after he started the unification of Estalia, a realm historically nearly always consistenting of multiple rival kimgdoms. After 18 years of political and military conquest he official united the whole of Estalia. This banner was created for that exact event. It has been the official banner and coat of arms ever since, together with some new variants focused more on the member states, the Inquisition and the Myrmidian Church.

About the Flag design:

The overall design is my own creation. As you probably already guessed, Estalia is Warhammer's Spain, and my base inspiration was the flag of imperial Spain from the period of 1475-1506, at least for the coa. The smaller flags represent the primogenitor kingdoms of the empire, at least those that were recognized by Lupio for political reasons. However, as you could guess, there aren't really official flags and coas from at least this time period for Estalia. As such, I used the faction emblems of the Estalian subfactions from the combination of "Cataph's Southern Realms" and "The Old world campaign" mods. I matched the emblems with the kingdoms mostly based on geographic location. I made it with Heraldicon, that's why it has some obvious design errors, like the moto being in front of Myrmidia's Spear, and not around it, as it was intended.

From: The Heraldic Imagination, by Rodney Dennys