The Onion Bag is a humiliation/torture device invented by Meg.
The bag is used against Jennifer when she was accused of ripping Meg's love letter to Diana during the 'Goat Sisters' chapter. Jennifer was sealed inside of the bag and taken outside while the members of the Red Crayon Aristocrat Club lined up with insects and dropped them into the opening. When the members finished their deeds and left, Jennifer was squirming inside the bag as the insects moved around inside.
The insects dumped into the bag included a dragonfly by Meg, a spider by Diana, a mantis, and a cookie infested with ants.