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1. To caramelize sugar, in an 8-inch heavy skillet cook 1/3 cup sugar over medium-high heat until sugar begins to melt, shaking the skillet occasionally to heat the sugar evenly. Do not stir (see photo 1, below). Once the sugar starts to melt, reduce heat to low and cook about 5 minutes more or until all of the sugar is melted and golden, stirring as needed with a wooden spoon. Immediately divide the caramelized sugar among four 6-ounce custard cups or ramekins; tilt custard cups to coat bottoms evenly. Let stand for 10 minutes.
2. Meanwhile, preheat oven to 325 degrees F. Combine eggs, half-and-half, 1/3 cup sugar, and vanilla. Beat until well combined but not foamy. Place the custard cups in a 2-quart square baking dish. Divide egg mixture among custard cups. If desired, sprinkle with nutmeg. Place baking dish on oven rack. Pour boiling water into the baking dish around custard cups to a depth of 1 inch. Bake for 30 to 45 minutes or until a knife inserted near the centers comes out clean.
3. Remove cups from water. Cool slightly on a wire rack before serving. (Or cool completely in custard cups. Cover and chill until serving time.) To unmold, loosen edges of flans with a knife, slipping point between flans and sides of custard cups. Invert a dessert plate over each flan; turn plate and custard cup over together. Remove custard cups from flans.
4. Makes 4 flans