In a food processor, pulse the garlic and cilantro until finely chopped. Add all of the remaining ingredients except the lamb; pulse until a paste forms. Spread 1/4 cup of the paste over the lamb chops.
In a saucepan, whisk remaining paste with 1/3 cup of water. Warm the sauce over low heat; it should be pourable.
Light a grill or preheat a grill pan. Grill the chops over a medium-high fire for 4 minutes per side, or until an instant-read thermometer inserted in the thickest part of a chop registers 125° to 130° for medium rare. Transfer the chops to a platter. Spoon some warm peanut sauce over the lamb chops and serve, passing the extra sauce on the side.
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