Zen Knitting

To get a felted bag, you would knit a bag that is a lot larger then the finished size in a wool yarn that you know will shrink when it is washed. That is what felting is. It is the shrinking of the knitted item so that the material becomes very tight and usually you don’t see the stitch definition any more.
If you want to make the bag and have it look the way it shows, then you would need to felt it or knit it on much smaller needles and knit a piece that is the same size as the finished item. No, it won’t look the same, but you might like it as much. A felted item often doesn’t need a lining in it, but a knitted one does.
Look again at the pattern and see what the size is of the bag when you are done knitting and then look at what the size is after it is felted. You will see a huge difference. Try doing one as it calls for in the pattern and see if you like the process. Felting can be a lot of fun. Just make sure you don’t use a superwash wool or any that the label says can be washed in a regular load as that kind won’t shrink.
I love Ravelry too and have a lot of patterns for bags that I am trying to choose from too. Good luck

Many knit bags are also felted for a couple reasons. Felting makes the yarn very compact, so items in the bag won’t stick out. Felted fabric doesn’t really stretch, so the bag won’t sag under the weight of its contents. And the felted fabric is sturdier, so the bag will hold its shape better.

If you decide not to felt the bag, your finished piece will be larger. You’ll probably want to sew a fabric lining for it, for the reasons above.