The Union Jack is a combination (union) of 3 flags. The flags of St George, St Andrew and St Patrick.
The flag of St George is white with a red cross. The flag of St Andrew is blue with a white diagonal cross and the flag of St Patrick is white with a red diagonal cross.
In 1603 King James VI of Scotland became King James I of England and United England & Scotland under a new flag combining the Cross of St Andrew with the Cross of St George, which the Navy referred to as The Union Jack. In 1801 King George III updated the design when he added the Cross of St Patrick.
The flag is normally called the Union Jack because it represents a union of four countries. England, Ireland, and Scotland and Wales (although the current flag does not include a flag from the latter*).
Union Jack is a misnomer for the actual flag, because a jack is a flag that is flown on a Jack staff which is a small flag pole on the back of a naval ship. Hence the flag should be called the Union Flag.
In 1606, the first flag of Great Britain was developed, which included the crosses of England and Scotland (at this point, Ireland had not been united with England or Scotland). The red vertical ross (England) had to be put onto the white on blue cross (Scotland) and a white border was added for reasons of Heraldry. This flag was used during the reign of James 1st & Charles 1st (1603 to 1649) and up until 1801. In that year Ireland became united officially with England. King George III then updated the design by adding the Cross of St Patrick.
The designers of the day had to ensure that all the crosses could be recognized as individual flags as well as existing in the same flag together. They achieved this by making the white background (Scottish Cross) broader on one side of the Irish red than on the other, this meant that all of the individual crosses could be clearly recognized & the Irish Cross had its original white background.
If a nation or a principality’s flag has a small Union Jack in its corner, then that country is probably a member of the Commonwealth Nations; some examples: New Zealand, Australia, and the Canadian provincial flags of Ontario, Manitoba, and British Columbia.
The Union Jack is the most important of all British symbols, and it is flown by representatives of the United Kingdom all over the world; in the military and the navy, and in royalty.
The flag should always be flown with broader white diagonal in the higher position, nearest the top of the flagpole (as the earlier of the two to be placed on the flag, the cross of St Andrew, is entitled to the higher position). If it is ever flown upside down, with the broader white stripe at the base, it is usually taken as a sign of distress! Usually this only happens on the high seas, but was also widely used in this manner when forces were under siege, as in the Boer War, or during the fighting in India during the late 18th century.