Vaughan is a major doubt after breaking his right middle finger playing for Yorkshire last week.
Flintoff, who captained England's failed Ashes defence in Vaughan's absence in Australia, was sacked as vice-captain after a drink-fuelled escapade during the World Cup in the Caribbean.
''The new coach may have changed his mind but Flintoff was removed from the position of vice-captain in the Caribbean,'' Botham told Reuters at the launch of his new book My Illustrated Life in London.
''In my opinion that was wrong because the guy did well in Australia in very trying circumstances and managed to win a couple of one-dayers.
''When Flintoff was suspended they then justified it by bringing out things that happened in Australia the previous winter...I think that was wrong.
''If you need to discipline Andrew, fine, but don't drag out stuff from a previous tour. It was just another example of poor management.
''It's tough on Andrew and it will be tough if Vaughan is not there. The way they are talking it will be between Andrew Strauss and Paul Collingwood. But (new coach) Peter Moores is now in charge and he will make his own decision.''
New era Botham said it was important that Vaughan be fit in what is the beginning of a new era under Moores, who replaced Duncan Fletcher.
Botham added: ''Vaughan's a walking disaster, you cringe every time he dives for the ball or gets hit. He's been so unlucky with injuries it's beyond comprehension but he's without doubt England's best captain.'' Botham also blamed England's slump in fortunes since winning the Ashes in 2005 on poor management.
''The use of central contracts has been very poor,'' he said.
''Central contracts are great but they've been abused over the last two years to the extent that players have been booking their holidays in between tests.
''I'm sorry, they aren't good enough to do that...they are not good enough to dictate when they play and when they don't play. You don't see the Australians do it and they are the best in the world.
''Bowlers need to bowl and batsmen need to bat. It's an insult to supporters.'' Botham felt Moores must quickly stamp his authority on the England side, starting with the series against the West Indies.
''Peter Moores has to do it his own way and clear out any debris left from the last coach and bring in people he wants to work with not people handed down to him,'' Botham said. ''And I think he will do that.''