Preheat oven to 325°. Line a 9″x 13″x 2″ baking pan with foil, leaving a couple of inches hanging over each short side. Butter foil.
Combine 1/2 cup sugar and 1 & 1/2 ounces macadamias in food processor. Pulse until finely ground. Add flour and baking powder. Pulse until mixed. Add butter and pulse until mixture is combined and powdery.
Press dough firmly into bottom of prepared pan. Sprinkle the top of the dough with water. Sprinkle finely chopped macadamias and 1/3 cup sugar on top of dough. Press firmly into dough.
Bake for 30-35 minutes, or until cookies are golden and firm.
While cookies are still warm, use the overhanging foil to remove the cookies from the pan onto a cutting board. Cut into squares, using a sharp knife.
Let cookies cool completely. They should become crisp as they cool. If they aren’t crisp after cooling, place them back in the pan and bake for 10-15 minutes at 300°.