Heat oil in a saucepan over medium heat; add onion and garlic and cook until tender. Stir in flour, mixing until smooth.
Gradually add chicken broth, water and enchilada sauce, mixing until smooth. Stir in chili powder and salt. Cook over medium heat, stirring constantly, until thick. Reserving 1/2 cup cheese, mix remaining cheese with chicken and olives.
Dip corn tortillas in prepared sauce for about 5 seconds. Spoon 3 tablespoons chicken filling across center of each; roll up and place seam side down, in a shallow 2 1/2-quart baking dish.
Pour remaining sauce over tortillas. Bake at 350°F for 15 minutes. Sprinkle with reserved cheese and continue baking 10 minutes. Garnish with sliced ripe olives if desired and serve immediately.
Makes 4 servings.
