Preheat your oven to 350°F (175°C).
In a medium skillet, sauté the diced onion until translucent (about 3-4 minutes) over medium heat.
Add the shredded chicken, cumin, garlic powder, chili powder, and a pinch of salt and pepper. Stir everything together until well mixed and heated through. Remove from heat.
In a separate bowl, mix together the sour cream and 1 cup of green chile enchilada sauce.
Grease the bottom of a 9x13-inch baking dish. Begin layering by placing 3 tortillas at the bottom of the dish. You can tear them into smaller pieces to fit the dish.
Spread half of the sour cream and green chile sauce mixture over the tortillas.
Add half of the chicken mixture over the sauce, followed by ½ cup of the shredded cheddar and Monterey Jack cheese.
Repeat the layers: tortillas, sauce mixture, chicken, and cheese.
Top with the remaining cheese and a sprinkle of diced green chiles.
Cover the casserole with aluminum foil and bake for 20 minutes. Then, uncover and bake for another 10-15 minutes, until the cheese is bubbling and golden.
Let it cool for a few minutes before serving. Garnish with cilantro or a squeeze of lime, if desired.