  We develop a model of gamma-ray flares of the Crab Nebula resulting from the
magnetic reconnection events in highly-magnetized relativistic plasma. We first
discuss physical parameters of the Crab nebula and review the theory of pulsar
winds and termination shocks. We also review the principle points of particle
acceleration in explosive reconnection events (Lyutikov et al. 2017a,b).
  It is required that particles producing flares are accelerated in highly
magnetized regions of the nebula. Flares originate from the poleward regions at
the base of Crab's polar outflow, where both the magnetization and the magnetic
field strength are sufficiently high. The post-termination shock flow develops
macroscopic (not related to the plasma properties on the skin-depth scale)
kink-type instabilities. The resulting large-scales magnetic stresses drive
explosive reconnection events on the light-crossing time of the reconnection
region. Flares are produced at the initial stage of the current sheet
development, during the X-point collapse. The model has all the ingredients
needed for Crab flares: natural formation of highly magnetized regions,
explosive dynamics on light travel time, development of high electric fields on
macroscopic scales and acceleration of particles to energies well exceeding the
average magnetic energy per particle.
