In medium saucepan combine onion, water, garlic, and chili powder; cook until onion is tender. Stir in tomato sauce, vinegar, honey, salt, and pepper. Bring to boiling, stirring constantly. Boil for 5 minutes or until sauce is slightly thickened. Brush onto meat during last 10 minutes of grilling. Heat remaining sauce until bubbly. Pass with meat. Makes about 1-3/4 cups.