This is the Spanish flag as it was during Francisco Franco's reign of terror. Spain changed it in 1978, removing the eagle Franco had added; the current flag looks like this. So guess which flag Target put on a t-shirt?
Why, that would be the fascist one.
During the Spanish civil war and his 30-year dictatorship that followed, Franco and his forces executed tens of thousands — perhaps even hundreds of thousands — of their political enemies, including the poet Federico García Lorca and many other intellectuals. Because of his regime's widespread human rights abuses, symbols of Franco's rule, like this flag, with its Francoist slogan "UNA, GRANDE Y LIBRE" ("ONE, GREAT AND FREE"), are banned in Spain.
Nevertheless, Target is currently selling this World Cup tie-in children's t-shirt for $6.99. Maybe Peaches Geldof and Jenni Duncombe, the Australian woman who thought her Nazi swastika flag was pretty, will want to stock up?

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It's not the first time a controversial symbol has ended up on an item of clothing apparently by mistake — earlier this year, a Marc Jacobs bag was hurriedly removed from sale after the law professor Susan Scafidi pointed out that its embroidery resembled a swastika. We expect this shirt will be pulled from the shelves shortly, too.
Infant/Toddler Boys' Short-Sleeve Spain Tee — Dark Red [Target]