After searching our library card catalog and checking out a bunch of books on the subject we highly recommend the following reading material for the 4th of July.
The Star-Spangled Banner Illustrated by Peter Spier 
Be prepared to sing this one! The text is the lyrics to our national anthem. Did you know it has more than one verse? Frances Scott Key wrote 4 verses to go with the music of The Star-Spangled Banner. This book includes historical facts and all 4 verses at the appendix. Peter Spier has stunning illustrations to accompany three of the verses. My 3-yr-old absolutely loved this one.
Our Flag a Little Golden Book Classic, by Carl Memling, illustrated by Stephen Cook
This is such a wonderful Preschool/Kindergarten/1st grade level history of how the United States of America became a country. This book has beautiful illustrations and just the right amount of text. The last few pages give the rules of conduct concerning the flag as well as our Pledge of Allegiance. This was the perfect “Mommy, why do we celebrate the 4th of July?” book.
Update 6/20/19:
There is a chapter titled, Fourth Of July, in Little Town on the Prairie by Laura Ingalls Wilder.
heavens to betty 