Start by washing and drying the flour sack towels. They will likely come out of the dryer a little wrinkled so it is best to iron them also.
Lay the towel on a flat surface on top of craft paper or cardboard as the paint will bleed through to the back.
Place the stencil in desired area and press down firmly. I prefer adhesive stencils because you don’t have to worry about them sliding around but any stencil will do.