Prepare the chicken by washing and patting them dry with a paper towel, before chopping them into cubes.
In a blender, blend 2 chilies, garlic, ginger and half of the unsliced onion into a puree.
In a sealable container, marinate the chicken pieces with the blended aromatics, garam masala powder, 1 tsp of salt, and 1/2 tsp of ground black pepper, for about 1/2 -1 hour. The longer you marinate the tender the meat gets, I did for about an hour.
In a bowl, beat the yogurt with the sugar and set aside.
In a heavy base non-stick pan, heat the ghee/butter. In batches, saute the chicken pieces until cooked through. Make sure your heat is not too high as it will brown up the chicken. Remove and let it rest on a plate.
Add the sliced half of the onion to the pan, and 1/2 tsp of the salt. Saute till translucent.
Add the yogurt mixture and simmer on med heat for 4-5 min. Return the chicken pieces to the pan along with the milk. When adding the milk, make sure to remove your pan from heat, and then once stirred in properly, return it on the heat. This will stop the milk from breaking.
Add the remaining 2 chilies. Simmer the chicken on low-med heat for about 25-30 min or until the milk evaporates and the ghee separates to create a thick shiny white gravy. Serve with Polao or Nutmeg Rice.