Remove the grater from the food processor and put in the dough blade.
Sprinkle the cheese with the salt and onion powder and add in butter. Pulse until butter is distributed throughout cheese and mixture begins to resemble coarse sand.
Add in flour and process until dough comes together. Through the opening on food processor lid, add in cold water while the dough is mixing. Mix until just combined.
Scoop the dough out onto parchment paper, silicone baking mats, or even wax paper and form into a flattened circle.
Place another piece of parchment paper (or silcone baking mat or wax paper) on top of the dough and roll out to about ⅛ inch thick.
Refrigerate dough for 1 hour.
Preheat oven to 350 degrees.
Using a knife, pizza cutter, or pastry cutter, cut dough into ½ inch strips lengthwise and then repeat width-wise to form ½ inch squares. Using, a toothpick or end of a skewer, poke a hole in the center of each cracker.
Place cheese crackers onto a baking sheet about ½ inch apart from each other.
Bake for 10-13 minutes or until crackers are just set and edges slightly browned. Be sure to watch carefully last couple minutes so crackers don't burn.
Use freshly grated cheese so that these cheese does not contain any anti-caking agents--as this will change the consistency of these crackers.
Use a sharp cheddar--both white cheddar or yellow cheddar work.
Use whole wheat, all-purpose flour, or if you need Gluten-Free Cheese Crackers, use an all-purpose cup for cup gluten-free flour.
If you happen to not have a food processor, hand grate your cheese and then use 2 forks or pastry cutter to mix the dough.