Preheat your oven to 350°F (175°C).
In a large skillet, heat the olive oil over medium heat. Add the sliced squash and chopped onion. Sauté for about 5-7 minutes until the squash is tender and the onion is translucent.
Remove the skillet from heat and let the mixture cool slightly. Stir in the salt, black pepper, garlic powder, and thyme.
In a large bowl, combine the sautéed squash mixture with the shredded cheddar cheese, crushed crackers, sour cream, beaten eggs, and milk. Mix until well combined.
Pour the mixture into a greased 9x13-inch baking dish, spreading it evenly.
Bake in the preheated oven for 30-35 minutes, or until the top is golden brown and the casserole is set.
Allow to cool for 5-10 minutes before serving.