If the flash drive is an older drive that is been used frequently for several years, it's write cycles are near depleted, in which case Windows(R) will view that drive as being in RAW format when viewed under Properties, even when 'formatted' to FAT32. In this case, please purchase a new drive.
If this is a brand new drive you are referring to, you could try to format it using the command line if Windows(R) Explorer--the app that shows My Computer, etc., fails to correctly format it correctly. Before continuing, please note your drive letter. (e.g. E:) that will show up in My Computer, such as "SD Drive (E:)".
1.To start, press the Windows key+R to invoke the Run box. Type cmd and press Enter as soon as it comes up.
2. In the command prompt, type (without quotes and assuming E: is your drive letter--substitute E: for your drive letter) "format E: /fs:fat32" and press Enter.
3. Windows(R) will ask for a drive label. You can call it flash or whatever, or leave it blank. When you're done, press Enter.
4. Once the disk is formatted, you can type exit and press Enter. In My Computer, you should now be able to format the drive.
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If it still does not work, check the integrity of your flash drive and USB ports by testing them.
TIP: Though not required when cached for safe removal by Windows(R), safely remove the drive by clicking the Safely Remove Hardware icon in the notification area/system tray whenever you're done with it. This will allow the flash drive to last longer. In fact, Macs require you eject it before removing it to avoid an error message.