Having landed in Candia (Iraklion) to prevent the threatened attack on the town by Cretan Christians, the British army was faced with the problem that the water supply to the town was in the hands of the insurgents. On several occasions Cretan Christians damaged the aquaduct and attempted to disrupt the water supply necessitating British, or in this case Scottish, troops to venture out of the town and repair the pipes. The date on which the photograph was taken is unclear: Since the Seaforths left the island in November 1897, it must have being taken between March and November that year, and at least one such incident was reported by Colonel Chremside, Commander of British troops on the island, as occuring on 15th April 1897. [C.8429. Turkey No.9. Reports on the situation in Crete. Inclosure No.2 in No. 9.] A similar situation had arisen in Canea, see here.
The prominant display of the National Flag of any European troops operating outside the towns was laid down in the standing orders of the day promulgated by the Council of (European) Admirals who effectively had control of the island. It was deemed necessary in order to clearly identify the troops as European rather than Ottoman, although that didn’t stop the Cretan Christians firing on them on more than one occasion. In this case though, given that the soldiers are wearing kilts, it seems to have been an unecessary precaution.
This photograph is one of the few taken by a British soldier, rather than by a commercial photographer, and is used here by kind permission of Alex Graeme, whose Grandfather took it.