In a large skillet that has a lid, heat butter over medium heat. Add potatoes and onions and cook, stirring frequently, for 5 minutes.
In a large measuring cup or small bowl, combine broth, cream, salt, pepper, and nutmeg. Add to potatoes and onions, and increase heat to medium-high. Bring to a boil. Reduce heat to a simmer (medium-low heat), and cover pan. Cook, covered, for 13-15 minutes or until potatoes are fork tender and sauce has started to thicken. Sprinkle with cheese, recover, and cook for 2-3 minutes or until cheese is melted.
Optional: If you are using an oven-safe skillet, broil under high heat for 2-3 minutes or until golden brown on top.
Let stand for 5-10 minutes before serving for sauce to thicken.