Saute onion in butter. Add chilies, tomato juice, cheddar cheese soup, chili powder and garlic powder. Add chopped chicken. Break tortillas into about 6 pieces each. Put a layer of tortillas, layer of chicken mixture, and layer of grated cheese. Repeat until all is used.
Bake at 35 degrees for about 3 minutes in 2 quart casserole, covered, and then uncover and add more grated cheese and cook until cheese is melted.