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Papa's got a brand new bag
This line references the fact the narrator has a new style, including a new set of dance moves.
Given James Brown's personal history and the musical importance of this song, the line has inspired considerable speculation as to its meaning. One suggestion is that Papa's new "bag" is a drug reference. For decades, a "bag" has been slang for a quantity of drugs, most commonly, marijuana or heroin, and Brown has been arrested more than once on drug charges.
A second possibility is that Brown is referencing the song's path-breaking new rhythmic style. "Papa's Got a Brand New Bag" was the most important song Brown released, as it developed the signature style that would lead directly to funk and eventually to hip-hop. Rock critic Dave Marsh is among those who support the argument that Brown knew that he had a groundbreaking hit on his hands. With this song, Marsh says, "Brown declared a new order of rhythm and himself its avatar" (source).
While the argument makes sense, Brown never confirmed it himself. He was fully aware that he was reshaping R&B by shifting its focus and emphasizing rhythm over melody and harmony. As he explained in his autobiography, "I had discovered that my strength was not in the horns, it was in the rhythm" (source). Yet he never discussed this particular lyric within this context, nor did Brown typically use lyrics in anything other than a literal way. Most likely the line means exactly what it suggests within the context set by the other lyrics. "Papa" is simply busting out his new moves on the dance floor.
He's doing the jerk, he's doing the fly
He's doing the monkey, the mashed potatoes
Jump back jack, see you later alligator
You're doing the twist, just like this
He's doing the fly, every day and every night
The thing, like a boom-a-rang
These lyrics refer to several popular dance styles from the 1960s.
James Brown, known as "The Hardest Working Man in Show Business," put together elaborate revue-like live performances that were legendary for their sheer intensity. (He reportedly lost several pounds during each dance-heavy concert.)
His fans were familiar with his signature moves—his high-speed shuffle, his jumps and splits, his one-footed flamingo slide step—and the night was not complete unless he performed his classic cape routine borrowed from big time wrestler Gorgeous George.
Brown also sprinkled several contemporary dance steps into his performances, and these are referenced in this song: the jerk, the fly, the monkey the mashed potato, the alligator, the twist, the boom-a-rang. Most of these were novelty dances tied to a particular performer or song.
The jerk, for example, was inspired by the song of the same name by Don Julian. The twist was popularized by the 1960 Chubby Checker hit, although the dance had much older roots. Jelly Roll Morton referred to the "double twist" in his 1938 song "Winin' Boy Blues"—even further back, minstrel performers sang the "Grapevine Twist" before the Civil War. Some students of dance have even argued that the basic movements of the twist were brought to America from Africa during the 18th century.