Coat a large skillet with oil and sauté the meat and onions on medium heat a few minutes.
Add the garlic for a minute more.
Add the tomatoes to the onions and garlic.
Bring to a low simmer.
Start adding the chili powder, one teaspoon at a time, tasting after each addition, until you get to the desired level of heat and chili flavor. For us that's around 2 Tablespoons. But it depends on your taste and how strong the chili powder is that you are using. Note that the tortillas and chicken will absorb some of the heat, so allow for that and let it be a little bit spicier than what you want in the finished dish.
Add a teaspoon of sugar if necessary to cut down on the acid from the tomatoes. You want more of the taste of the chili and less of the tomatoes for this sauce.
As the sauce simmers, dilute it with water to keep it from getting to thick as it simmers.
Remove from heat.
In a greased pan layer your tortillas then meat/tomato mixture then cheese.