Decide on a simple theme for the bag. Some themes to consider are counting, ABC's, or colors. You want to keep the bags very simple, as you are working with young children. They need to concentrate on one concept at a time.
Find a good book that matches the bag's theme. For example, Mouse Paint by Ellen Walsh is a great choice for literacy bags about color.
Choose puppets, flannel board pieces or stuffed toys that match the book's characters. For example, in the Mouse Paint bag, you'd want to add white mice, colored mice, a paintbrush, a small water bowl and a stuffed cat.
Find or make some simple worksheets that reinforce the concept. For the Mouse Paint color literacy bag example, you might want to look for worksheets that match colors with color words or a worksheet that requires them to identify all of the purple things on a page.
Write a letter to parents explaining how to use the bag, including ways to continue learning the bag's concept in everyday life. For a color bag, suggest having them ask their child to play I Spy colors or ask them to encourage children to choose clothing in one color to wear that day.
Laminate all worksheets and the letter to parents on both sides. This way, the literacy bags will be easy to reuse again and again.