Cut two medium onions (this will make about a 3/4 cup of gravy). Use more onions if you want more gravy. In a sauce pan add about three tablespoons of cooking oil or lard. Put the fire on medium and cook them stirring occasionally. The trick is to brown the onions uniformly, so if you see them browning too fast lower the fire a little. The more brown they get the more the fire needs to be lowered
Now that the onions are browned add enough water to just cover the bottom of the pan, put the fire on low and stir. The onions will come back up to heat. Keep stirring until the water is gone. Continue to cook them for another minute then add the same amount of water and stir. You'll start to notice that a gravy begins to form. Cook the water out once more and then add about a 3/4 cup of water a little at a time while stirring. Your onion gravy should appear before your eyes. Bring back to heat and stir for another few minutes.
You could strain this if you wanted to but when the entire mixture is added to a roast for instance, it will produce a little more gravy.