The Sons of Liberty were in the habit of meeting under a large tree (most village greens had one), which was called the "Liberty Tree".
This flag was raised in Taunton, Massachusetts on October 21, 1774. one of the first flags representing dissention in the Colonies.
This flag was raised as a symbol of frustration and unwillingness to be persecuted.
The Colonials warned the British that the Colonies were a force to be reckoned with, and would not accept the any loss of their rights or freedom.
The bold words "Liberty and Union" reflect the original sentiment of the Colonists, which was to be treated as equal citizens of the British Empire,
("No taxation with representation!") rather then be excluded from it.