"Buckle up, kids. Daddy's puttin'the flags down"
 

Majesty 2 has four types of control flags, two which are familiar to players of the original Majesty game: an attack flag, to reward heroes for attacking a target, and an exploration flag, to reward heroes for exploring a new area.
In addition, there are two new flags: a protection flag and a fear flag.

"Sometimes our missions end up with you trying to kill me. I'm not fond of those."

Protection Flag
A protection flag is placed on a particular unit, and lasts for a certain period of time. During this time, part of the money assigned to the flag is given to each of the heroes who protect the unit. The result is similar to the King hiring bodyguards for a certain period of time. If you need to continue protecting the unit after the time elapses, you can place a new protection flag.

"If anyone sees my spine laying around, please do not step on it."

Fear Flag
A fear flag is set on a part of the landscape, and also lasts for a certain period of time. The more money is assigned to the flag, the stronger is the heroes’ fear of the place. The flag also indicates what level of heroes the flag will scare away. The money on a fear flag is spent all at once, as soon as the player sets such a flag – and in this case, the money doesn’t go to any heroes. You simply pay for a sign that inspires fear and awe. But even though the money does not go to any hero’s account, it can have an economic effect for the player: the fear flag prevents heroes of a certain level from wandering into an area where they may be killed. Thus, the player saves money on resurrection or on hiring new heroes.   

"That's right! Big bad's back, and lookin' for a little action"

These flags are not free. They cost a certain sum of money from the treasury.
Your heroes themselves will evaluate whether it’s worthwhile to pursue a royal quest, and will often ignore royal flags. There are several reasons for this, and they depend on the hero’s character.

For example, a Mage moves slowly, so a flag located far away is less interesting for him than for a fleet-footed Elf. Heroes can also ignore a flag if it does not promise a large enough reward, or if too many heroes have already reacted to it, or even if the task is simply not sufficiently interesting for that particular hero.