Preheat the oven to 400°F (200°C) and lightly grease a 9×13-inch baking dish.
In a large bowl, toss the diced potatoes with olive oil, half of the ranch seasoning mix, salt, pepper, and optional garlic powder or paprika. Spread the potatoes evenly into the prepared baking dish.
Bake uncovered for 25 minutes, stirring once halfway through to ensure even roasting.
While the potatoes are baking, season the chicken pieces with the remaining ranch seasoning mix.
Once the potatoes have roasted for 25 minutes, remove the dish from the oven. Add the chicken and crumbled bacon to the pan and stir to combine well.
Return the dish to the oven and bake for another 25–30 minutes, or until the chicken is fully cooked and the potatoes are fork tender.
In a small bowl, whisk together the sour cream and milk until smooth. Drizzle the mixture over the hot casserole, then top with shredded cheddar cheese.
Return the dish to the oven for another 5–10 minutes, just until the cheese is melted and bubbly.
Garnish with green onions if desired, and serve warm.