Preheat oven to 350°F.
Soak bread slices in warm milk, then crumble into small pieces.
In a large bowl, combine crumbled bread mixture, ground beef, baking powder, poultry seasoning, salt, and diced onion. Mix well.
Shape mixture into 1 1/4-inch diameter meatballs.
Heat margarine and minced garlic in a large fry pan over medium heat.
Brown meatballs on all sides in the pan. Pour off excess fat.
Add cream soup and water to the pan, bringing mixture to a boil.
Transfer meatballs and sauce to a casserole dish.
Bake for 35 minutes until meatballs are cooked through and sauce is bubbling.