In a medium bowl, mix together the ground beef, 1/2 cup ketchup, bread crumbs, onion powder, steak seasoning, salt, and pepper. Form into small fat hamburger patties, or meatballs.
Heat oil in a large heavy skillet over medium-high heat. Place the patties in the skillet, and cook until browned on both sides. Remove patties to a plate, and drain grease from the skillet.
In the same pan, slowly stir together the remaining ketchup and water if the mixture seems thin, add a bit more ketchup, or if it is thick, add more water. Add the onion, and bring to a boil. Reduce heat to medium-low. Return the patties to the pan, cover, and simmer for 30 minutes. Stir after the 30 minutes, and if the gravy is still thin, continue simmering with the lid off until gravy thickens.
