That's House Telvanni's banner, with the sigil representing both the arcane arts ("mana swirls" representing the House's magickal prowess) and the house's affinity with mushrooms (the swirls are very organic, rather than mechanical).

Here's a picture of the Telvanni Council Hall in TES3, where you can see the similarities between the growth of the pod and the design of their sigil.

would this lore about the House Telvanni be basically true in ESO?

http://en.uesp.net/wiki/Morrowind:House_Telvanni