Used by native Vermonters to describe people from anywhere else in the country, regardless of whether or not your state has a higher elevation than Vermont. If you aren't native to Vermont, you're a flatlander, period. The term came about because of people from other states visiting the state on account of the ski resorts and the mountains.
"Those damn rich flatlanders come up here from freakin' California and buy up all our farmland and develop damn Walmarts all over the place."
"You're from Michigan? You're a damn flatlander."
"I'm a ridgerunner, not a flatlander."