North Korea eventually played its match against Colombia, winning 2-0, but only after receiving permission from the office of Supreme Leader Kim Jong-un.
The diplomatic row began after team officials ordered the players back to their locker room, delaying the start of the game for more than an hour. They informed Olympic staff that no further action would be taken until guidance had been sought from North Korea's national soccer federation.
That federation is officially headed by Kim Jong-un, the son of recently deceased leader Kim Jong-il. The level of control exerted by the North Korean government over every aspect of life in the country means that all major sporting decisions must be approved by the leadership.
During the men's World Cup in 2010, Kim Jong-il sanctioned the recruitment of a group of fans – taken from select dignitaries and their families – who were permitted to travel to South Africa to cheer on the team. Kim also demanded to be allowed to inspect the composition of the team before it was submitted.
Officials from the London 2012 organizing committee were deeply embarrassed by the error and swiftly issued an apology.
"Today ahead of the women's football match at Hampden Park the South Korean flag was shown on a big screen video package instead of the North Korea flag," LOCOG officials said in a statement. "Clearly that is a mistake. We will apologize to the team and the National Olympic Committee and steps will be taken to ensure this does not happen again."
[ Related: Greek athlete expelled for racist tweet ]
North Korea and South Korea are still officially at war after no peace treaty was signed following the end of the Korean War in 1953.
Once the North Korean team went back to the locker room following its initial warm-up, officials immediately tried to apologize and persuade them to start the game as normal – only to be told the delegation was seeking advice from its superiors on how to proceed. A small group of North Korea fans left the arena to a smattering of boos.
The Group G clash eventually got underway at 8.50 p.m., 65 minutes after it was scheduled to begin.
The incident, described as a "producer’s error," came just a week after a LOCOG spokesperson predicted there would be no such problems during the Games.
"It just isn't going to happen," said Niccy Halifax, when asked if a flag mix-up was possible. "It's not. It's not."
North Korea's will play the United States next week at Manchester's Old Trafford stadium.
More Olympics coverage from Yahoo! Sports:
More Olympic coverage from the Yahoo! Sports network:
• Will an unknown light the Olympic flame?
• Adrian Wojnarowski: Carmelo Anthony’s flaws hidden among greatness of Team USA
• Photos: Olympians behaving badly
- Sports & Recreation
- Politics & Government
- North Korea
- flag of South Korea