Preheat the oven to 350°F (175°C).
Wash and peel the potatoes. Cut them into thin slices, about ⅛ inch thick.
In a large pot, bring water to a boil. Add the sliced potatoes and cook for about 8-10 minutes until they are just tender (but not fully cooked). Drain and set aside.
In a mixing bowl, combine the sour cream, milk, butter, garlic powder, onion powder, salt, and pepper. Whisk until well blended.
In a baking dish, layer half of the potatoes, followed by half of the cheese. Pour half of the sour cream mixture over the cheese.
Repeat the layering process with the remaining potatoes, cheese, and sour cream mixture.
Cover the baking dish with aluminum foil and bake in the preheated oven for 30 minutes.
Remove the foil and bake for another 15 minutes until bubbly and golden.
If desired, top with crispy fried onions during the last 5 minutes of baking for extra crunch.
Let cool for a few minutes before serving.