The best way to kill them is for mages to use runes, and paladins to use bolts or arrows since they try to keep their distance from you, and may pull you into more Bonelords and Elder Bonelords.
High level sorcerers should take Flame Strike on the Elder Bonelord and its summons, so the summons dies. If it isn't possible to kill the Elder Bonelord right away (for example, because you're taking too much damage) you may need to use runes like Great Fireball to get rid of the summons. You should watch out for Demon Skeletons, which are not summoned and will deal quite a lot of damage if you are unprepared.
If you encounter them when you don't intend to hunt or pass through them, for example while completing The Paradox Tower Quest, it is best to use Sudden Death or Explosion runes; two or three hits should kill them quickly, and they will pose little trouble.
It is often advantageous to wear an Elven Amulet when fighting Elder Bonelords, as this will reduce all damage by 5%.