A lot of what is published in The Onion could be considered satire, but they also have some content that might be better described as spoof or parody news items.
The line between what is 'satire', 'parody', or a 'spoof' is often very thin, and some material could easily fall under more than one category. As a general rule though, 'satire' (defined as literary work in which human foolishness or vice is attacked through irony, derision, or wit) usually has some grounding in reality. An article about real people or events but which mocks some element of them through means such as exaggeration or introducing an element which is fabricated for the purpose of humour would be a satire - for example, if an Onion article told a story about a real politician in a fabricated situation for the purpose of creating a humourous outcome which was perhaps in-character for that politician and made an observation about their character.
On the other hand, I have read articles in the Onion which are entirely made-up - fabricated characters in fabricated events - and some might not consider these to be satire. Although it could be argued that the Onion satirises the manner in which mainstream media reports on events, so others may feel that even an article which says nothing about real people or events, if sending up the media coverage of such material, is still satire. Personally, I consider such material to be a "spoof" of the news, as there really is no way of saying how the media would cover material that has never even come close to happening. A 'spoof' news item is essentially a fake news item, but one created for humour or entertainment.
A 'parody' could be described as lying somewhere in between satire and spoof. Parodies often involve fabricated characters or events but which are recognisably similar to a real person or a real event. For example, if you read a story about an imaginary businessman who was incredibly successful, owned many large businesses and buildings, and had ambitions to become the president of the United States, you would instantly think that it was parodying a certain real-life person with a similar background and ambitions.
In many countries, there are laws protecting very specific types of satire and parody, so you may find a legal definition more helpful than a dictionary one.