The 3 White stripes:

• Top White Stripe represents the North side of the city.
• Center White Stripe represents the West side of the city.
• Bottom White Stripe represents the South side of the city.

The 2 Blue stripes:

• Top Blue stripe represents Lake Michigan and the North Branch of the Chicago River.
• Bottom Blue stripe represents the South Branch of the Chicago River and the Great Canal.

The 4 Red stars on the Center White Stripes represent something as well as each of the points on the stars themselves:

The First Red Star represents Fort Dearborn (added in 1939).
The Points of the First Red Star Signify:

• France 1693
• Great Britain 1763
• Virginia 1778
• Northwest Territory 1798
• Indian Territory 1802
• Illinois Statehood 1818

The Second Red Star represents the Chicago Fire of October 8-10, 1871.
The Points of the Second Red Star Signify:

• transportation
• labor
• commerce
• finance
• populousness
• salubrity

The Third Red Star represents the World's Columbian Exposition of 1893.
The Points of the Third Red Star Signify History of the Area:

• religion
• education
• esthetics
• justice
• beneficence
• civic pride

The Fourth Red Star represents the Century of Progress Exposition of 1933 (added in 1933).
The Points of the Fourth Red Star Signify:

• World's Third Largest City
• City's Latin Motto - “Urbs in Horto” meaning “City in a Garden"
• I Will Motto
• Great Central Market
• Wonder City
• Convention City