Heat oil in a large pot. Add onions, and fry till golden brown. Take out the onions, and place in a blender. Blend with ¼ cup water into a chunky paste.
In the same pot, heat the oil again and add onion paste. Fry for a few seconds and then add ginger garlic paste followed by mutton pieces.
Fry for 2 – 3 minutes till the colour of mutton changes, and then add coriander powder, red chili powder, turmeric and salt.
Fry for a minute or so, then add tomatoes. Fry for about 15 – 20 minutes till tomatoes soften.
Add about 2 cups of water. Adjust water based on the amount of gravy that is preferred.
Bring the salan to a boil, and then turn heat to low. Cover with the lid ¾th of the way, and cook for about 15 minutes. Add the potatoes and keep cooking, till the mutton and potatoes both are tender. This will take about an hour.
Once the mutton is tender, garnish with green chilies and coriander. Serve hot with naan or rice.