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 to 15 minutes or until potatoes are fork tender and sauce has started to thicken. Sprinkle with cheese, recover, and cook for 2 to 3 minutes or until cheese is melted.
Optional: If you are using an oven-safe skillet, broil under high heat for 2 to 3 minutes or until golden brown on top.
Let stand for 5 to 10 minutes before serving for sauce to thicken.