In a large pot or Dutch oven, melt the butter over medium heat.
Add the garlic and cook it until lightly golden, about one minute. Add the onion powder and flour and cook these for about a minute, stirring constantly until they are golden brown.
Pour the water or broth into the pot with the flour mixture, using a whisk to stir the mixture. Increase the heat to medium-high.
Add the frozen corn, potatoes, thyme, paprika, salt, and pepper. Add the bacon bits, stir, and bring this mixture to a low boil.
Reduce the heat to medium, and then bring the soup down to a simmer.
Simmer the soup for about 15 to 20 minutes, just until the potatoes are tender. Stir the soup every five minutes or so.
Remove about half of the soup to a deep bowl and use an immersion blender to blend it until it is smooth. Or, you can put half of the soup into a blender and puree it until smooth. Return the pureed soup to the pot and stir it into the rest of the soup, stirring to blend.
dd in the half and half and about half of the chives, stirring thoroughly. Stir the soup and heat it through, just until it is steaming.
Serve the soup in bowls, topped with a small sprinkling of the remaining chives. Store leftover soup in a tightly covered container in the refrigerator for up to five days. Reheat on the stovetop in a pot.