Start your campfire, light your grill, or preheat your oven to 400°F.
Toss the potatoes, onion and salt & pepper in a bowl, and place onto a large piece of heavy duty aluminum foil, or a double thickness of regular foil that has been sprayed with olive oil or cooking spray.
Cut the butter into small pieces and distribute across the top of the potatoes.
Fold over the aluminum foil to form a pouch, pour in water, and seal all of the edges.
Place on the campfire, grill, or oven and cook for 20-30 minutes, or until potatoes are tender.