Use of a Gold Star to signal that a family member had died in action was started during WW I by President Wilson's proclamation on 28 May 1918. After that point in time, a five pointed gold star was added to the traditional black arm band to indicate that a family member in the service of the United States of America had died.
During WW II, a flag with a blue star was hung (usually in the parlor window) to signal that a family member was on active duty in the armed forces of the United States of America. In the event that the service member died, a gold star was pasted over the blue star. This gave rise to terms such as Gold Star Moms, Gold Star Wives, Blue Star Mothers, Blue Star Moms, Blue Star Wives and organizations by those names.
Here are two videos produced by Reinhart Media. Click on the Triangle in the middle of the images to start the videos.
"The Blue Star Banner"(4:08)
"Blue Star Families"(1:25)
Here is the US Army definition of "Members of the immediate family" that are eligible to display the Service Flag and wear the Service Lapel Button:
(1) "Members of the immediate family" include wife, husband, mother, father, stepmother, stepfather, parent through adoption, foster parents who stand or stood in loco parentis, children, stepchildren, children through adoption, bothers, sisters, half brothers, and half sisters of a member of the Armed Forces of the United States.
Here is the US Army Definition of "Organizations" that are eligible to display the Service Flag:
(2) "Organizations" include those group organizations such as churches, schools, colleges, fraternities, sororities, societies, and places of business with which the member of the Armed Forces was or is associated.
We feel that this patriotic custom should be adopted for sisters, brothers, cousins, aunts, and uncles. In a word, we feel that any blood relative that is on active duty qualifies one for a blue star. During WWI, it was not uncommon for a window to have several stars displayed, one for each family member on active duty. Hopefully, acts such as this will help stoke the fires of patriotism within the citizens of the United States of America.
Below left is a scanned image of a Service Flag (blue star) that hung in a Hicksville, NY parlor for the duration of WW II, and has resided in the Luisa family bible since it was taken down upon the service members (Capt. Louis S. Luisa, CHC, US Army) return in 1945.
Above middle is an image of a Blue Star Flag that was created for you to download and print for your own personal use. Above right is an image of a Blue Sweetheart Flag for your own personal use. Simply click on either image, and you will be taken to a page with several sizes of the image so that you can select a size that fits your needs.