Place the hazelnuts into a stainless steel skillet. Over medium heat, toast the hazelnuts until fragrant and browned. (Keep the nuts moving around the pan with a spatula. Do not leave nuts unattended; they will burn quickly.)
Once done, transfer toasted nuts to a dinner plate. Spread out and allow to fully cool for about 5 minutes.
Next, preheat oven to 375°F. Line a baking sheet with parchment paper or a silicone baking mat. Set aside.
Once the nuts are fully cooled, transfer to a food processor. Pulse the nuts two or three times until a grainy, sand-like consistency with small chunks are visible. Do not ground too much, or the nuts may release their natural oil and began to turn to nut butter. See pictures in post of how nuts should look.
In a mixing bowl, beat together the butter and sugar until light and fluffy.
Add the flour and 1/2 cup of the hazelnuts. Beat until just combined.
Add one tablespoon of lukewarm water at a time, beating well after each addition. Once a dough is formed, do not add any more water.
Working with one tablespoon of dough at a time, roll into a ball and place onto the prepared baking sheet. Leave 2 inches of space between each cookie.
Using a fork, press a crisscross pattern into the top of the cookie. Top each cookie with a sprinkling of the remaining ground hazelnuts.
Bake for 12 minutes. Remove from oven and allow to cool for 3 minutes before transferring to a wire cooling rack to finish cooling.
Place the chocolate into a microwave-safe bowl. (If you want a thick chocolate coating, skip the addition of the coconut oil. If you want a thinner chocolate, add the coconut oil now.) On medium power, microwave the chocolate for 30 seconds. Remove and stir until smooth. You may need to microwave for another 5-10 seconds, depending on your microwave.
Dip each cookie halfway into the chocolate by lowering the cookie straight down into the chocolate and lifting straight up. Gently shake off the excess and lay cookie onto parchment-lined baking sheet.
Allow the chocolate to fully set and harden before storing. You can speed this up by placing them in the fridge for an hour or so.