Preheat and prep: Heat your oven to 375°F (190°C).
Grease a 9x13-inch baking dish. If using low-carb tortillas, cut them into halves to fit the pan.
Sauté the veggies: Warm oil in a large skillet over medium heat. Add peppers, onion, and zucchini with a pinch of salt and pepper.
Cook 5–7 minutes until slightly softened and lightly browned. Remove from heat.
Mix the sauce: In a bowl, whisk enchilada sauce with cream cheese until mostly smooth. Stir in 1 teaspoon chili powder, 1 teaspoon cumin, 1/2 teaspoon garlic powder, and 1/2 teaspoon smoked paprika.
Taste and season with salt and pepper.
Season the chicken: Toss shredded chicken with 1/2 cup of the sauce to moisten and flavor it. Fold in a handful of chopped cilantro.
Layer the casserole: Spread a thin layer of sauce in the bottom of the dish. Add half the chicken, half the sautéed veggies, and a sprinkle of cheese.
If using low-carb tortillas, add a layer now. Repeat layers, finishing with remaining sauce and a generous layer of cheese on top.
Bake: Cover with foil and bake 15 minutes. Uncover and bake 10–15 minutes more, until bubbly and lightly golden.
Rest and garnish: Let the casserole rest 10 minutes.
Finish with a squeeze of lime, extra cilantro, green onions, and any optional toppings like jalapeños or sour cream.
Serve: Cut into squares and serve warm. Add hot sauce if you like extra heat.