Heat the oil in a large, deep skillet and cook the lamb until browned on all sides.  If the skillet is large enough, add the onion and garlic and cook for 5 minutes more, then transfer to a large saucepan. If the skillet is not large enough, first remove the lamb to a large pan, then add additional oil to the skillet, if needed and sauté the onion and garlic before adding the mixture to lamb. Pour in the water. Bring the liquid to a boil, reduce the heat and simmer for at least 1 1/2 hours.

While the lamb is simmering, roast the green chiles (but not the jalapeños or serranos). Place them under a broiler and cook, turning, until all sides are blistered and blackened. Remove the chiles and immediately put them in a plastic bag or bowl (covered with paper towels) to steam for a least 10 minutes. Peel the chiles and remove the stems and seeds.

Chop half the roasted chiles and add them to the stew. Put the rest in a blender or food processor with the tomato sauce and puree until smooth. Add the puree to the stew, along with the jalapeños or serranos, the oregano, and sage. Approximately 10 minutes before the chili is cooked, add the fresh cilantro and salt. Taste and adjust the seasonings. Serves 4 to 6.