How do you want your quilt to look in the end? If you get enough squares to use or can get some more unwashed of the same kind of flannel, go ahead and piece it, then wash it. Remember that the quilt will look wrinkled and old (I love that look)but it will still be cozy and warm. Just add extra rows if you need it certain size at the end. If you want it to remain somewhat unwrinkled, then wash it first. You can put them in a garment bag and just soak and spin, don't agitate. This will reduce the fraying. It may still fray a bit, but not much.
There is no right or wrong, just different results depending on what you decide to do.