Combine hamburger, onion, salt, pepper and nutmeg in a large bowl; mix well with food-safe (vinyl or nitrile; powder-and latex-free) gloved hands.
Place formed meatballs as a single layer in frying pan on medium heat; brown and turn until browned thoroughly; remove from heat.
Place browned meatballs in a medium casserole dish, but keep frying pan as is for step 6.
Return frying pan to medium heat; mix flour and water thoroughly in a small bowl; pour into frying pan; stir constantly until bubbling up and thickening. (Keep all the tasty brown bits in the pan!)
Pour gravy formed in frying pan over the meatballs in the casserole.
Place uncovered casserole in oven; bake 30 minutes.