The stars on the American flag each represent a state. On June 14, 1777, the first Flag Act stated, "that the union be thirteen stars, white in a blue field, representing a new Constellation," according to USA Flag Site. As of May 2014, the American flag has 50 stars.
Another act passed in 1818 stipulated that a star be added to the flag on July 4 following a state's admission to the nation, according to About.com American History. By order of President William Howard Taft in 1912, stars were to be arranged in six rows of eight stars each. When Hawaii, the 49th state, entered in 1959, President Dwight D. Eisenhower ordered that the arrangement of the stars change to seven rows of seven stars "staggered horizontally and vertically." With the admission later that year of Alaska, he changed his order to accommodate the new star.