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Finely dice 1 medium yellow onion (1 cup). Shred 8 ounces sharp cheddar cheese (about 2 cups).
Place 1 cup whole milk, 1 cup sour cream, 3 tablespoons all-purpose flour, 1 tablespoon Dijon mustard, 1 teaspoon kosher salt, and ½ teaspoon garlic powder in a 6-quart or larger slow cooker and whisk until combined. Add 1 bag frozen diced potatoes, the onion, and 6 ounces of the cheese (about 1 ½ cups), and stir to combine.
Cover and cook until the potatoes are tender, stirring halfway through, about 5 to 6 hours on the LOW setting, or 3 to 4 hours on the HIGH setting.
During the last 15 minutes of cooking, sprinkle evenly with the remaining 2 ounces cheese (about ½ cup). Cover and cook until the cheese is melted. Serve with freshly ground black pepper and chopped chives or parsley leaves.