It is used during the quest "Rocking out".
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There are multiple onion patches in RuneScape, but the most popular locations to get onion are at the Rimmington Onion Patch (just north of Rimmington, next to road), and in Fred the Farmer's house in Lumbridge. It's also possible to obtain onions from the Grand Exchange though, and is usually easier to get from the Grand Exchange instead of walking to one of the onion patches in RuneScape, as the patches are not located close to any bank.
Imps are found all over runescape. There are some by the sheep farm in lumbridge, a bunch by the Karamja volcano, there are some by and in falador, few by Rimmington, I believe there's one near the Ice Mountain, etc. Like I said, they're every where.
Check the Grand Exchange in northwest Varrock, you can find most items there. Also you can buy a ring mould in Rimmington, which is south of Falador and West of Port Sarim.
You use a tinderbox with it You take some Swamp Tar to the Chemist in Rimmington. Click and use the Swamp Tar on the lamp oil still (the small one, not the big one outside his house) and dip the lantern in to collect the lamp oil you had just made. Then finish the job by lighting the oil with a tinderbox.
First, you must become a member, and speak to a construction guide (located in varrock and some other places). Buy a "house" then choose the style. Head to the rimmington house portal then go to " enter house - building mode".