Preheat the oven to 350 degrees F (175 degrees C). Lightly grease a medium-sized baking dish.

Combine ground beef, oats, evaporated milk, 1/2 cup onion, egg, chili powder, salt, garlic powder, and pepper in a bowl. Form into 1 1/2 inch balls; arrange in a single layer in the prepared baking dish.

Combine ketchup, brown sugar, remaining 1/4 cup onion, liquid smoke, and garlic in a separate bowl; pour evenly over meatballs.

Bake in the preheated oven, uncovered, until an instant-read thermometer inserted into centers reads at least 160 degrees F (72 degrees C), about 1 hour.