In a large mixing bowl, combine the halved baby potatoes, olive oil, garlic powder, onion powder, salt, and pepper. Toss to coat the potatoes evenly.
Spread the seasoned potatoes in a single layer on a large baking sheet. Roast for 20 minutes, until they're starting to become tender.
While the potatoes are roasting, heat a large skillet over medium heat. Add the Italian sausage and cook, breaking it apart with a spatula, until browned and cooked through (about 5-7 minutes).
Once the potatoes have roasted for 20 minutes, remove the baking sheet from the oven. Add the cooked sausage to the potatoes, stirring to combine.
Drizzle the ranch dressing over the mixture, then sprinkle the shredded cheddar cheese on top.
Return the baking sheet to the oven and bake for an additional 10-15 minutes, or until the cheese is melted and bubbly.
Remove from the oven, garnish with chopped chives, and serve hot.