Her name was Betsy Ross, and it's very likely she actually did make the first American flag that came to be known as the Star-Spangled Banner.
In the early days of America's Revolution, flags abounded. For example, Massachusetts had a flag with a rattlesnake and the words "Don't tread on me." (Paul Revere supposedly designed it.) Colonists rallied around Liberty Tree and Pine Tree flags that used various combinations of stars and stripes. Some looked too much like the British flag. Another was mistaken as a token of surrender. Something "American" was required.
Betsy Ross was a hardworking Quaker lady who had a shop on Arch Street in Philadelphia. A widow, she upholstered furniture, covered umbrellas, and sewed curtains. She also made banners and flags for ships.
One can almost picture a tall, blue-uniformed Gen. George Washington striding into Ross's shop in the spring of 1776, accompanied by Robert Morris and George Ross (Betsy's uncle). They were a secret committee sent by Congress to arrange for a new flag.
Washington's rough design featured a blue field and red-and-white stripes. On the blue, he wanted 13 six-pointed stars, one for each original colony. Ross persuaded him to change them to five-pointed stars. They were easier to cut out and stronger in effect. The good general agreed about the stars, and also with Ross's idea that the flag should be rectangular, not square, the better to wave in glory.
Ross set about cutting stripes and stars and stitching them together. She was in a rush, as Washington had to leave Philadelphia soon. Just before he left, he came to pick up the sample flag. He liked what he saw. Ross was in the American-flag business.
Historians don't all agree, but Betsy Ross's little shop can still be seen on Arch Street in Philadelphia. Congressional records and Washington's letters place him in Philadelphia at the right time. Ross's descendants, years later, gave sworn statements as to what Betsy Ross (a modest Quaker, remember) had told them about Washington's visit to her shop and how he'd placed an order she was never to forget.
Today is Flag Day, begun in 1885 to mark the day Congress adopted the Stars and Stripes.