Preheat the oven to 350 degrees F (175 degrees C).
Stir water, butter, minced onion, parsley, salt, and thyme together in a saucepan; bring to a boil. Remove from heat and stir in milk. Mix in potato flakes; add sour cream and beat until fluffy. Pour potato mixture into a casserole dish and sprinkle Cheddar cheese over the top.
Bake until cheese is melted and bubbling, 15 to 20 minutes.