Make the dumpling batter: In a medium bowl, add 1 cup all-purpose flour, 1/2 cup milk, 1 tbsp olive oil, 1 tsp thyme, 1/2 tsp onion powder, 1/2 tsp garlic powder, and 1/4 tsp baking powder.
Cook the vegetables: Turn on your Instant Pot to the ‘Sauté’ setting. Add 2 tbsp unsalted butter, 4 oz onions, 1 tsp garlic, and 4 oz mushrooms. Cook for 3 minutes, stirring occasionally.
Cook the chicken: Add 16 oz chicken, 6 oz carrots, 2 oz celery, and 4 oz green peas to the pot. Cook and stir for 5 minutes.
Add liquids: Add 6 oz potatoes, 1/2 tsp salt, 1/4 tsp pepper, 2 1/2 cups chicken broth, and the remaining 1/2 cup milk into the pot. Stir to combine.
Add the dumplings: Lightly brush your measuring tablespoon with the remaining 1 tbsp olive oil. Use it to scoop out the dumplings and drop them into the pot. Do not stir the dumplings.
Cook the soup and dumplings: Cover the pot with the lid. Turn the valve knob to the ‘Sealing’ position. Set your device to the ‘Steam’ program and cook for 10 minutes.
Thicken the soup: Carefully turn the valve knob to release the steam before opening the lid. Set your Instant Pot to ‘Sauté’ program and cook for another 10 minutes, stirring occasionally.
Garnish and serve: Transfer the soup to a deep dish or bowl. Sprinkle with freshly chopped parsley and serve immediately.