Preheat Oven: Set oven to 350°F. Grease a 9x13-inch baking dish.
Prepare Potatoes: Peel (optional) and slice potatoes into ⅛-inch rounds. Soak in cold water to prevent browning.
Make Sauce: Melt butter in a saucepan over medium heat. Sauté onion and garlic for 2-3 minutes. Stir in flour to form a roux, cook for 1-2 minutes. Gradually whisk in milk, stirring until thickened (5-7 minutes). Season with salt, pepper, thyme, and nutmeg.
Add Cheese: Remove sauce from heat, stir in 1 cup cheddar until melted.
Assemble: Layer half the potatoes in the baking dish. Pour half the sauce over. Repeat with remaining potatoes and sauce. Top with remaining ½ cup cheese.
Bake: Cover with foil and bake for 45 minutes. Uncover and bake 15-20 minutes until golden and bubbly. Test potatoes for tenderness.
Serve: Rest for 10 minutes, garnish with parsley, and serve warm.