4 should be okay in a pot that size.

I wouldn't use peat pots next time though, you want a soil that is easy to get off their roots and peat pots hold together better than normal potting soil.

that is a good point, I'll probably use paper cups next time. Thanks!

NO ! NO ! Don't waste your precious onions by THINing.
Just when you want to transplant them in the garden(sooner better), soak them in water and separate them gently and plant them at proper spacing. Onions are VERY toleran to transplanting. You can just throw them somewhere and come back in a day or two and plant them, they will still grow.
I am suggestin this of course. lol

Some folks leave the multiple seedlings together at transplant time; they push apart as they grow. Just plant a bunch of 4 seedlings every foot. Yields should be similar to individual seedlings planted every 3 inches, and it's a whole lot less work.