Prepare the Squash

1. Preheat the Oven: Preheat your oven to 350°F (175°C). Grease a 9×9-inch baking dish or a similar size dish with cooking spray or butter.
2. Cook the Squash: In a large skillet, heat the olive oil (or butter) over medium heat. Add the sliced squash and chopped onion, sautéing for about 5-7 minutes until the squash is tender and the onion is soft. Stir occasionally to prevent burning.
3. Season the Squash: Season the squash and onion with garlic powder, onion powder, thyme, salt, and black pepper. Continue to cook for another 2 minutes, allowing the seasonings to meld with the vegetables. Once done, remove from heat and set aside to cool for a few minutes.

Make the Casserole Mixture

4. Mix the Wet Ingredients: In a large mixing bowl, combine the sour cream, mayonnaise, and beaten egg. Stir until smooth and well-blended.
5. Combine the Squash with the Mixture: Add the cooked squash and onion mixture to the bowl with the wet ingredients. Stir gently to combine, ensuring that the squash is evenly coated with the creamy mixture.
6. Add Cheese: Stir in ¾ cup of the grated cheddar cheese (reserve the rest for the topping). Mix well until the cheese is evenly incorporated.

Prepare the Topping

7. Make the Topping: In a small bowl, combine the crushed crackers or breadcrumbs with the melted butter. Stir until the crumbs are well-coated in butter.
8. Assemble the Casserole: Pour the squash mixture into the prepared baking dish, spreading it evenly. Sprinkle the remaining ¼ cup of cheddar cheese over the top, followed by the buttered crumbs.
9. Bake: Bake the casserole in the preheated oven for 30-35 minutes or until the top is golden brown and the casserole is bubbling at the edges.
10. Cool: Allow the casserole to cool for 5-10 minutes before serving.

Cut and Serve

11. Serve: Once the casserole has cooled slightly, cut it into squares or scoop it out with a spoon. Serve it as a side dish or as a light main course alongside a fresh salad.