Saute the potatoes, onions, and garlic in the vegetable oil for 5 minutes or until almost soft. Then add the green chile, water, and salt. Boil for 15 minutes.
In a small bowl combine the flour and water and whisk well to make the thickener. Add the thickener and let simmer for 5 minutes. This can be served in a bowl with a tortilla and sour cream. You can add beef, chicken, or pork. This can also be used as a sauce for your favorite Mexican dishes. Or even over a steak or chicken breast. Garnish with lettuce and tomatoes.