Nasty word, flay. It means to peel or beat the skin of a person or animal, and not necessarily a dead one, either. Nowadays it more commonly means to criticize harshly someone or something, usually in public, leaving them raw and wounded.
To be flayed alive was a common punishment in ancient times for political enemies or traitors. The ancient Assyrians were particularly good at it. Today, if you want to have your skin — metaphorically — peeled in public, you go on reality TV. It can be equally nasty.