In short, flagging is the step that comes before moderating. When you flag a post, it is sent to our moderation queue where our Packback team then reviews the flagged post and determines whether or not to moderate it.
When you moderate a post, it gets removed from the community immediately and the student will be notified via email (which will explain why the post was moderated and how to earn back credit).
Note: While the "Flag" option is available to everyone in the community (students, professors and TA's), the "Moderate" option is only available for TA's and professors. If you're a professor or a TA, you're free to moderate a post whenever you believe it necessary!