Preheat oven to 400°.
Butter the bottom of a 2 qt baking dish. Add peaches, white sugar, lemon juice, ½ teaspoon nutmeg, and cornstarch and combine well. Bake for 5 minutes in the oven.
Meanwhile, prepare the topping. Stir together the flour, brown sugar, baking powder, cinnamon, nutmeg and salt until well combined.
Cut butter into small pieces blend it into the flour mixture to form a coarse meal, almost like wet sand. (you can do this with a pastry blender, but I find it just as easy to combine it with your fingers.)
Stir in just enough of the water to thin out the mixture a bit. It should still form nice clumps and should not be runny.
Once peaches are finished cooking, remove them from the oven and spoon the topping over them. Don’t worry about getting this perfectly even – the mixture will spread out as it bakes so just try to be symmetrical when dropping your spoonfuls of topping over the peaches.
Return the dish to the oven and bake for about 25 minutes, or until the top is golden brown and your peaches are bubbling.