Smash the lemongrass with the back of a knife at ½-inch intervals, then bend the stalk and tie it in a knot. This will help release the flavor of the lemongrass.
Heat the oil in a large Dutch oven over medium heat. Add the onion, garlic, and ginger and sweat until aromatic and softened, about five minutes. Add the curry paste, coriander, and turmeric and stir to coat the vegetables in the paste.Once incorporated, toss in the star anise, lime leaves (if using), cinnamon and lemongrass. Stir in the coconut milk and water and bring to a simmer. Add the chicken and simmer, uncovered, for 20 minutes. Add the potatoes and peanuts and cook until tender, about 25 minutes longer.
Remove the star anise, cinnamon, lime leaves, and lemongrass and discard. At this point the curry may be cooled and refrigerated for up to 2 days. (Reheat over medium-low heat, stirring frequently to avoid scorching.)
Stir the fish sauce and lime juice into the curry, then adjust the seasoning with sugar and salt. Serve with rice.