Onion powder is a dehydrated, ground onion that is commonly used as a seasoning it is a common ingredient in seasoned salt and spice mix, onion powder is a commercially prepared food product that has several culinary uses. it small strong but adds a subtle onion flavor when used in a dish. Onion powder is basically dried onion that’s been ground. Although dried onion is just the onion flesh, onion powder can also include dehydrated onion skins and roots. Onion powder is three times more potent than dried onion, so for 1 cup of fresh onion, you would substitute only 1 tablespoon of onion powder.