The Backpack is Lone Wolf's primary method of carrying Items. It holds 8 Items at most, and Meals are counted individually. A Backpack is required to hold Items (Lone Wolf cannot carry any Items without one) and he can only possess one at a time.
Rules are the same for Grand Master : 8 items at most. However he can level up this limit from the book 26 The Fall of Blood Mountain with the Drodarin Bag of Holding.