You want the sections to overlap. At the bottom of the pot, just fold the excess napkin under. The top of the pot is a little hard to do. What I've done for the first layer is tear out only three sides leaving one side the straight edge of the napkin. The straight edge goes carefully along the top.
Shorter pieces work better.
Let dry overnight and cut out the hole in the bottom. You can paint the inside of the pot to match your napkin color scheme. Napkin Applique dries tacky and this does not. A clear coat of glaze can be sprayed over the Mod Podge when dry. Otherwise, open it.