Granulated Onion is made from ground, dehydrated onions, typically the pungent bulb onion variety and possesses a strong odor. Because they're dehydrated they have a long shelf life.
While granulated onions can be added directly to most foods, it is best to rehydrate them before adding to dishes that don't have sufficient amounts of liquid in them, or if you're adding later in the cooking process. To rehydrate you can place them in a small bowl, cover the granules with water and let them sit for about 15 minutes, then drain off the excess water or you can mix with just enough cool water to make a smooth paste which can then be adding to the dish towards the end of cooking.
You can also substitute 1 Tablespoon of granulated onion for 1 /2 cup of fresh minced onion.