In a medium saucepan, bring water, salt and garlic to a boil; slowly stir in grits. Reduce heat; cook and stir for 3-5 minutes or until thickened. Remove from the heat. Add butter, 1 cup cheese and chilies; stir until butter melts. Beat eggs and milk; add to the grits and mix well. Pour into a greased 2-qt. baking dish. Bake, uncovered, at 350° for 45 minutes. Sprinkle with remaining cheese.