This flag is the Aragonese King's flag, but many terriories of him took as its own flag sometimes with some differences. The first King that used this flag was Alfonso II. Also Catalonia, Valencia, Mallorca and Sicily have this flag and also other regions like Castellon or Tarragona but with some details.
Valencian flag has a vertical blue strip.
This strip is green in Castellon flag.
The strips in the flag of Tarragona are wavy.
Sicily has two details in white and black
Mallorca has a Castle.
The used by occitanian terrotories can be because Aragonse King has an important heritage in the South of France. (not only Rousillon or Montpellier).
My City (Vila-real) was a royal city and was founded by James I. By that we have his flag as a local flag.