A report by Estyn, based on inspections of schools in 1999-2000, says that displays in some of the schools put too much emphasis on tired and cliched images of the principality. Pictures of dolls in Welsh costume, red dragon flags, daffodils, sheep and castles were commonly used in schools to give a sense of Welsh identity.
The Welsh inspectorate's report says they were "all useful in conveying standard images of Wales and to help convey a sense of identity to younger pupils. However, there is a danger that when used with older pupils, they convey an image that gives a false impression of modern Wales".
A spokesman for Estyn said: "Some images of Wales convey stereotypical and archaic impressions of the country. The reality is much more exciting."
A spokesman for the National Assembly for Wales said: "We need the children using and seeing images which reflect modern Wales, like the Assembly or the Millennium stadium in Cardiff. We want to say Wales is not all about choirs and sheep. Music is a large part of Welsh culture and we now have the Stereophonics and Catatonia - so we should celebrate that.
"Traditional images are being modernised and many girls are now wearing trendy mini-dresses which have sparkly red dragons on."
Estyn also commends a school in the report which celebrates the different ethnic and cultural backgrounds of its pupils who also share a common Welsh heritage. Pupils at the school are encouraged to refer to themselves as "Welsh Bengali", "Welsh Yemeni" and "Welsh Somali", as well as 'Welsh Welsh'.
The Welsh Tourist Board has been promoting the Cool Cymru movement which celebrates modern Welsh culture.
A spokeswoman for the board said: "When looking at Welsh identity and culture, it is important to recognise the success of Welsh celebrities such as actors Ioan Gruffydd, Catherine Zeta Jones, Anthony Hopkins and the sportsmen and women who have succeeded in their field."