Ad blocking can be done in several ways:

• Packages adblock + luci-app-adblock. The latest adblock online documentation can be found here: README
• Packages simple-adblock + luci-app-simple-adblock. The latest Simple Adblock online documentation can be found here: README
• Package banhostlist (has not been updated since 2015)
• Running Adguard Home on OpenWrt

This forum post (from 2017) gives a short comparison between Adblock and Simple Adblock. Summarized, it says that Adblock is more powerful and might receive additional features in the future while Simple Adblock aims to be easier to use and more performant.

Instructions for Adblock quick setup via terminal. Most steps can also be done using the GUI with LuCI.

# Install packages
opkg update
opkg install adblock
 
# Install dependencies for uclient-fetch - this is crucial for downloading from SSL blocklist sources, which are used in the default configuration of Adblock
opkg install libustream-mbedtls
 
# Provide web interface
opkg install luci-app-adblock
 
# Enable Adblock
uci set adblock.global.adb_enabled="1"
 
# Backup the blocklists
uci set adblock.global.adb_backupdir="/etc/adblock"
 
# Save and apply
uci commit adblock
/etc/init.d/adblock restart