Preheat and prep: Heat your oven to 375°F (190°C).
Lightly grease a 9x13-inch baking dish.
Sauté aromatics: Warm oil in a skillet over medium heat. Add onion and cook 4–5 minutes until soft. Stir in garlic and cook 30 seconds until fragrant.
Season: Sprinkle in chili powder, cumin, smoked paprika, salt, and pepper.
Stir to coat the onions and bloom the spices for 30 seconds.
Make the creamy base: In a large bowl, combine softened cream cheese and sour cream. Beat until smooth. Fold in the sautéed onion mixture.
Add the saucy elements: Stir in the green enchilada sauce and diced green chiles.
Taste and adjust salt and pepper.
Combine with chicken: Add shredded chicken and 1 1/2 cups of the shredded cheese. Mix until everything is evenly coated.
Assemble: Spread the mixture into the prepared baking dish. Top evenly with the remaining 1 1/2 cups shredded cheese.
Bake: Place on the center rack and bake 20–25 minutes, until the cheese is melted and bubbling around the edges.
Broil for color (optional): Broil 1–2 minutes to get those golden, toasty cheese spots.
Watch closely to prevent burning.
Finish and serve: Let rest 5–10 minutes to set. Garnish with chopped cilantro and a squeeze of lime. Serve with sliced avocado, a dollop of sour cream, or a crisp side salad.