The name comes from Duffel, a town in Belgium where the thick cloth used to make the bag originated. More recently, a duffel bag typically refers to the specific style of bag, though the phrase may also be used to refer to any large generic holdall or a bag made of thick fabric.
It is often used as luggage or to carry sports equipment by people who travel in the outdoors. Duffel bags are also often used by military personnel; when used by sailors or marines they are sometimes called seabags.
The duffel bag acquired considerable status in the surfer subcultures of post-WWII California and east coast Australia. In the case of California, this probably grew out of its use in the late 1940s and 1950s by ex-Navy personnel. In Australia its use became popular in the early 1960s. Carrying a duffel bag was synonymous to being (or pretending to be) a surfie. Australian duffel bags of the early 1960s were made of canvas and were usually light khaki or faded ochre in colour. Dispensing with the use of rope to pull the eyelets of the top together, the surfie would simply hold the throat of the duffel bag—containing towel, swimming trunks and other personal belongings in one hand and sling it over his shoulder (they were very rarely used by beach-going girls). Their use had died out by the mid-1960s.
The Australian duffel bag may well have as its direct cultural ancestor the swag—the rolled-up woollen blanket slung in bandolier-fashion across the shoulder and chest—which was carried by itinerant workers or persons of no fixed abode (swagmen) in country areas of the mid-19th to mid-20th centuries (cf. the early 20th-century American slang term bindle-stiff, i.e. a hobo carrying a bindle, in other words, a rolled up bundle containing belongings). Otherwise known in folklore as a matilda (cf. the song "Waltzing Matilda" written by poet Banjo Paterson), the swag, too, may have had its origin in the military: Prussian soldiers of the 19th century are said to have called their rolled up greatcoats carried bandolier-fashion by the same name.