This episode's Order of the Straight Arrow appears to be modeled closely after the Cub Scouts or Boy Scouts. Fortunately, there are only a few bits of Indian lore.
First, Bobby comes home with a necklace of brown and orange balls. The following dialogue ensues:
PEGGY: But don't Indian necklaces usually have an eagle claw or a bear tooth?
HANK: (sigh) Wesley thought they were too pointy.
HANK: I was thinking we could do a lesson on tying knots. Then we could use them to make something fun--like a bow and arrow.
WESLEY: Whoa. Bow and arrow is a little too "hunty-killy," don't you think?
WESLEY: But you know what we could make? A dreamcatcher.
HANK: Yeah, that sounds awful.
These bits probably aren't too far from a typical American family's experience with Indians. They know the usual smattering of stereotypical Indian lore. They try to be more sensitive than previous generations were. But they still do made-up things like the Wematanya salute, which makes them look like roosters.
Order changes with the times
Curiously, the Order of the Straight Arrow also appeared in a 1997 episode of King of the Hill. In that episode, the Order resembled the Y-Indian Guides much more than the Boy Scouts. Hank and his friends spouted a lot of pseudo-Indian nonsense.
In the recent episode, there was no mention of the prior episode's events. The two episodes have only two things in common. In each, Hank and his friends belonged to the Order as boys, and "Wematanya" (or "Wematanye") was the Order's Indian word.
Comparing the two episodes is instructive. It seems the creators were fans of the Y-Indian Guides back in 1997 and copied the program accordingly. Since then, the Y-Indian Guides have learned that Indians don't appreciate their phony Indian lore and have modified their approach. Now they're much more like a Scouting organization.
Maybe viewers complained about the 1997 episode, or maybe the creators wised up on their own. But they've updated their fictional Order of the Straight Arrow to match the changes in the real Y-Indian Guides. Now both groups are much less stereotypical.
As King of the Hill finishes its final season, give it credit for including Indians once again. With many appearances by John Redcorn and several episodes devoted to Native subjects, King of the Hill may have done more than any TV show since Dr. Quinn, Medicine Woman. As with The Simpsons and Family Guy, many of its episodes are flawed, but at least these shows haven't excluded Indians entirely.
For more on the subject, see The Best (Only) Native on TV.