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Heat oil in a skillet over medium heat. Add onion; cook until soft and translucent, 3 to 5 minutes. Add garlic; cook until fragrant, about 1 minute. Add green chiles and Mexican tomato sauce; stir to combine. Add shredded chicken, Mexican cheese blend, and Neufchâtel cheese. Cook and stir until cheeses have melted and mixture is warmed through, about 3 minutes. Season with salt and pepper.
Heat tortillas in a skillet or directly on the grates of a gas stove until soft and pliable. Place 3 tablespoons of chicken mixture down the center of each tortilla. Fold over and roll into taquitos.
Preheat an air fryer to 400 degrees F (200 degrees C).
Place taquitos in a single layer in the air fryer basket, making sure they are not touching, and mist with avocado oil. Cook until golden brown, 6 to 9 minutes. Turn taquitos over, mist with avocado oil, and air fry until crispy, 3 to 5 minutes.