Republic of Iceland
Who & why: a national referendum on 20–23 May 1944 votes overwhelmingly (nearly 97%) to dissolve the 1918 union with Denmark and become a republic; independence is formally declared at Þingvellir — the same site as the medieval Althing — on 17 June 1944. The date is deliberate: it is the birthday of Jón Sigurðsson, the 19th-century leader of Iceland's independence movement. The timing is also a real historical irony — Denmark itself is under Nazi occupation at the moment its union with Iceland is dissolved, and Copenhagen, powerless to object, does not.
What it represents: no new flag is adopted. The blue-white-red cross flag approved for Iceland in 1915 and used as the full state flag since 1918 simply continues, now flying over a republic instead of a kingdom — the only transition in this whole lineage that changes nothing about the flag itself.