Heat butter or oil in large saucepan over medium-high heat. Add onion; sauté until golden, about 5 minutes or more. Add sherry or wine and potatoes. Stir, cooking until the sherry or wine evaporates, about 30 seconds.
Add broth and bring to a boil. Reduce heat to simmer; cover and cook until potatoes are tender, about 15 minutes.
Turn off the heat and add the milk and chives. Blend together with an immersion blender, or ladle into your blender or food processor and blend until smooth. Season with salt and pepper to taste.
Adapted from cooksillustrated.com