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In American English, would you say that chips, cookies, and candies are usually packed in bags or would you say they are packed in packages? I can't see much difference between a plastic bag and a rather big loose plastic package as their definitions seem to overlap to an indefinite extent. Would you please help me distinguish those concepts ("bag" and "package") when it comes to food packaging?

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I'd call this a package of cookies:

package

I'd call this a bag of chips:

bag

I'd call this a box of cereal:

box

The box is made of cardboard on all sides. The bag has no firm sides, and no inner packaging; it's much like a sealed pouch. A package is often made using a material similar to the bag, but the inner plastic tray makes it a package.

NOTE: This is only for packaged foods. There are other kinds of bags:

bags

and this is a package made from a box:

a package while it's being shipped that becomes a box once it's emptied

Interestingly enough, after you open that package, it becomes an empty box.

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“Bag” is definitely the word of choice for packaging that is loose, allowing for movement of the contents.

“Package” would be understood, but is generally reserved for rigid packaging (even if the outside consists of sealed plastic). A point of possible confusion is that many people use “package” when referring to something that has been (and is currently) packed for shipping (e.g. cardboard boxes).

“Box” does not appear on your list, but, in my mind, is the word in general use for rigid containers with rectangular sides (usually made from thin cardboard and containing a sealed bag which holds the items).

This probably goes without saying, but the convention is always to refer to the outermost container.

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A bag is a specific type of container, made from a loose material, such as plastic or cloth, although there are also paper bags.

A package, generally speaking, refers to the entire packing container and its contents. This could be contained within a bag, a box, or some custom wrapping of sorts.

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