Your reputation is actually influenced by votes from people who have reputations greater, or equal to 25, and vote for you. Other than that, your reputation is influenced by the Steem Power of people who vote for your posts, not their reputations (however people with more SP tend to have more rep). Also, lower rep people can influence your reputation (as long as their rep is above or equal to 25). However, flags from people with a lower reputation then you do not count towards your reputation.

The Steemit FAQ is actually wrong about this, see Issue #2674