Wash and dry chicken pieces; remove all visible fat. Combine flour with salt and pepper to taste and chili powder; dredge chicken pieces in seasoned flour, shaking off excess.
In deep, heavy skillet heat olive oil over medium heat, lightly brown chicken pieces in 2 batches to avoid overcrowding. Remove chicken from skillet; set aside. Add more oil to skillet, if necessary. Sauté onion, about 4 minutes, while scraping pan; add remaining ingredients, except parsley.
Return chicken to skillet, stirring to coat. Cover; reduce heat to low and cook 35 minutes or until chicken is tender and no longer pink (180°F).
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