I use Crayola crayons. The preferred fabric is a solid (like muslin) and I enforce it with freezer paper before coloring. If I want to blend colors I often start with a white crayon. When it is time to remove the wax, I remove the freezer paper and sandwich the piece between a brown grocery paper sack on the bottom and paper towels on the top. The wax will be removed but the color stays. If the color is not saturated enough, I go over it with more crayon and repeat. It is best to do any outlines before adding the wax or it will act like a resist and not accept the pen markers. It is also nice to add embroidery outline but that can be done after the coloring.
If you use the special fabric crayons, you will color the picture on paper and iron the design off onto fabric. Just remember that your design will be mirrored. Either way works but the fabric crayons are so much more expensive.