They have to be equipped using the character inventory slots and multiple copies can be equipped at any one time. Banners need to be assigned to a specific unit subject to the relevant restrictions in the pre-battle menu, will be remembered for future battles and can be manually changed at will. There may be restrictions regarding the type of character or unit that can equip and/or benefit from banner effects. The so-called generic banners are available to all racial factions.
How to obtain?
Similar to other items, there is a small base chance for banners to be dropped after a victorious battle and randomly but according to rarity and subject to the relevant racial restrictions. Therefore, common banners are more likely to drop than rare ones and in greater quantity. You can only earn banners of your race or those termed generic and available to any racial faction. Drop chances can be increased with a variety of abilities, skills and items.
In addition, there is also a small base chance to steal a banner from an enemy lord after a victorious battle. Conversely, there is also a small chance for you to have a banner stolen after a defeat subject to the relevant racial restrictions. That is to say that you cannot lose a racial banner against an army of a different race. Steal chances can be increased with a variety of abilities, skills and items.
Items such as banners are ranked according to rarity - see main page for comprehensive information. However, in this page they are all labelled with the common rarity so it is obvious some banners are stronger than others. Therefore, it is assumed the game developer is still to address this perceived rarity display bug.
There is a dedicated page for each set of banners introduced in each game, namely:
Banners are used cumulatively so, for example, those added in Total War: Warhammer are also available in Total War: Warhammer II and in Total War: Warhammer III.