The economic development of China’s mountainous areas has been rapid, but the impact of flash floods is often ignored during regional development planning. Therefore, a method needed to be developed to simulate flash flood disasters and analyze the trends in flash flood disasters with regional development. Taking Guanshan River Basin as the research area, we combined the digital elevation model (DEM) with the inflow hydrograph, using the topography-based hydrological model (TOPMODEL). Verified by historical flash flood disasters, the watershed model was built based on the finite volume conservation flood routing model (FLO-2D). Then, we simulated the hazard distribution of flash flood disasters, developed a risk status assessment factor (RSAF) for flash flood disasters and calculated the increased ratio from 2003 to 2018. The results show that in 2003, the total hazard area of flash flood disasters affecting human settlements was 61,121 m2, which increased to 118,404 m2 in 2018. Since 2003, with the development of the regional economy, more residents moved to risk and extreme risk zones; thus, the risk of flash flood disasters also increased. Due to the significant damage caused by the flash flood on 5 August 2012, some of the local residents moved away from the high risk and extreme risk zones, indicating that the risk trend of flash flood hazard was consistent with the regional development of Guanshan River. We provide suggestions for regional economic development planning; the risk assessment for flash flood disasters must be considered to ensure the stable development of the regional economy, and using the RSAF would be efficient.