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To soften the cashews: Boil them for 10 minutes until soft. OR soak the cashews for four hours or overnight. Drain before using.
To make the nacho vegan nacho cheese: Add the softened cashews, water, and all the remaining ingredients to a blender, and blend until smooth. It will be very watery.
Pour into a small saucepan and heat over medium-high heat, while stirring. If you don't have a high-powered blender, you may want to pour the liquid through a fine mesh strainer or cheesecloth into the pot, to remove any cashew bits that didn't grind up. This will ensure a smooth cheese texture. As you stir it will start forming clumps, and then all of a sudden it will become a cheesy gooey mass of yumminess. This takes about 5 minutes. Continue to cook and stir for an additional minute or two to make sure it has firmed up completely.