* Storm downgraded to Category 2 hurricane
* Packs tropical storm-force winds over hundreds of miles
* Intense storm surges, inland flooding expected
* 10 million people in potential disaster zone (Adds latest position and wind speed, power outages, Cooper quote, Long comment on allegations, adds byline, Sea Breeze dateline)
WILMINGTON/SEA BREEZE, N.C., Sept 13 (Reuters) - Hurricane Florence's winds began whipping coastal North Carolina on Thursday as the slow-moving tempest began to unleash fierce rains that forecasters warned would cause catastrophic flooding across a wide swath of the U.S. southeast.
The center of Florence is expected to hit North Carolina's southern coast Friday, then drift southwest before moving inland on Saturday, enough time to drop as much as 40 inches (1 meter) of rain in places, according to the National Hurricane Center.
An estimated 10 million people live in the storm's path, according to the U.S. Weather Prediction Center, and coastal businesses and homes were boarded up in anticipation. More than 1 million people had been ordered to evacuate the coasts of the Carolinas and Virginia and thousands moved to emergency shelters, officials said.
Florence's maximum sustained winds were clocked on Thursday at 105 miles per hour (165 kph) after it was downgraded to a Category 2 on the five-step Saffir-Simpson scale, according to the NHC. The winds had been as high as 140 mph earlier in the week when the storm had rated as a Category 4 major storm, but North Carolina Governor Roy Cooper warned against complacency because of the drop.
"Hurricane Florence was uninvited but she's just about here anyway," he said at a news conference. "My message today: Don't relax. Don't get complacent. Stay on guard. This is a powerful storm that can kill. Today the threat becomes a reality."
The storm's center was about 145 miles (230 km) east of Wilmington, North Carolina, at 11 a.m. EDT (1500 GMT) but tropical storm-strength winds and heavy rains already were hitting North Carolina's Outer Banks barrier islands. Some 6,000 power outages had already been reported by 10 a.m. EDT (1400 GMT).
Florence could bring wind-driven storm surges of seawater as high as 13 feet (4 meters) and NHC Director Ken Graham said on Facebook they could push in as far as 2 miles (3 km). Heavy rains were forecast to extend into the Appalachian mountains, affecting parts of Alabama, Tennessee, Kentucky and West Virginia.
Roslyn Fleming, 56, said her granddaughter was baptized in the inlet near where she lives in the coastal community of Sea Breeze and on Thursday morning she used her iPad to make a video of the scene.
"I came to video it so I can remember what it looked like before the storm because I just don't think a lot of this is going to be here (after Florence)," she said.
The storm will be a test of President Donald Trump's administration less than two months before elections to determine control of Congress. After criticism for its response in Puerto Rico to last year's Hurricane Maria, which officials there said was responsible for 3,000 deaths, Trump has vowed a vigorous response to Florence and defended his handling of Maria.
"3000 people did not die in the two hurricanes that hit Puerto Rico," Trump said on Twitter. "When I left the Island, AFTER the storm had hit, they had anywhere from 6 to 18 deaths ... Then, a long time later, they started to report really large numbers, like 3000."
Trump provided no evidence to support his challenge.
Brock Long, the head of the Federal Emergency Management Agency (FEMA) in charge of disaster response, has come under investigation over his use of government vehicles. He said on Thursday he was focused on Florence but that he had followed all statutes and laws would cooperate with any investigation.
Emergency declarations were in force in Georgia, South and North Carolina, Virginia, Maryland and the District of Columbia. Millions of people are expected to lose power and it could take weeks to resolve the outages.
Cathy Belanger, 60, and her husband were among about 7,000 people who left their homes for shelter centers in North Carolina. As she smoked a cigarette outside the shelter set up in a high school in Washington, Belanger they learned a lesson when they tried to ride out Hurricane Hugo in their home in 1989.
"When it comes to this kind of storms, I ain't gonna lie," she said. "I'm a big chicken. I go into panic mode. I freak out."
(Additional reporting by Bernie Woodall in Fort Lauderdale, Florida, Anna Mehler Paperney in Washington, North Carolina, Brendan O'Brien in Milwaukee and Stephanie Nebehay in Geneva Writing by Brendan O'Brien and Bill Trott Editing by Scott Malone and Nick Zieminski)