You take a walnut shell, make a sail for it, use a toothpick for a mast, and attach it with clay. If you have lots of walnut shells to choose from try to pick one that stands up pretty straight. A few of my boats have a listing problem and look like they are ready to topple at the first
storm they encounter.
I made a square sail for my pirate ship and triangles for my sailing ships. If you care to make historically accurate ships, the World Flag Database has all sorts of great information about flags. You can search by terms like "Navy" or by color or country of origin.