Add the onion and garlic cloves to a food processor. Pulse several times until finely chopped. Add half the mushrooms to the food processor and pulse another few times until mushrooms are finely chopped.
Transfer the onion/mushroom mixture to a large bowl. Add the ground chicken, bread crumbs, egg, 2 tablespoons marsala wine, 1/4 teaspoon kosher salt and 1/4 teaspoon pepper.
Using clean hands or a pastry blender, mix the ingredients until well combined.
Form 2 tablespoons chicken mixture into a ball and place on a baking sheet lined with parchment. Repeat until all mixture has been used.
Heat the olive oil in a large skillet over medium high heat. Add the meatballs to the pan being careful not to crowd the pan and working in batches, if necessary. Brown the meatballs on all sides. Transfer the skillet to the oven and roast for 10-15 minutes or until cooked through.
Remove the skillet from the oven and transfer the meatballs to a platter. Cover with foil to keep warm.
Return the skillet to the stovetop and add the butter to the pan. Melt the butter oven medium high heat. Add the remaining mushrooms to the pan and cook for 2-3 minutes, stirring occasionally. Stir in the minced garlic and cook for 1 minute. Sprinkle the cornstarch over the mushrooms and stir. Cook for 30 seconds.
Pour the remaining marsala wine over the mushrooms and deglaze the pan, scraping the bottom of the pan with a wooden spoon to loosen the brown bits. Stir in the chicken stock and bring the mixture to a boil. Add the onion powder and Italian seasoning. Season with salt and pepper, to taste.
Return the meatballs to the pan and cook for 3-4 minutes just to warm through.
Serve the meatballs with the sauce over pasta or mashed potatoes, if desired.
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Notes
Meatballs can be made in advance and frozen in an airtight container for up to 3 months. Sauce can be made up to 48 hours in advance and stored in an airtight container in the refrigerator.To heat the frozen meatballs, arrange on a baking sheet lined with parchment and bake at 425 degrees until no longer frozen in the center.