The scale factor from the actual flag to Magnolia's scale drawing is 10/25 = 2/5.

Therefore, the height of the scale drawing is 15*2/5 = 6 inches.

The area of the actual flag is (1/2)*15*25 = 187.5 square inches.
The area of Magnolia's scale drawing is (1/2)*6*10 = 30 square inches.

To find the actual area from the scale drawing, we need to multiply the scale drawing area by the square of the scale factor: (2/5)^2 = 4/25.
So the actual area is 30*(4/25) = 24 square inches.

Therefore, the area of Magnolia's scale drawing is 30 square inches and the actual area is 24 square inches.

This means that the scale drawing overestimates the actual area by 6 square inches.