In a 2 quart saucepan combine water and sugar and bring to a boil.
Cook for a minute longer and add in the grated apples.
Mix in the orange zest, orange juice and the chopped nuts.
Continue to cook over medium heat until the syrup has been absorbed by the apple mixture. This might take around 10 minutes.
Remove from heat and let the mixture cool down a bit.
Mix in the graham crackers before putting it in the fridge for about 30 minutes.
In the meantime, mix together the coconut and cinnamon, and put in a shallow dish.
Pinch off a bit of the apple mixture and shape into balls by rolling between the palms of your hands. This will be a sticky situation, so if you prefer, you can use powder-free vinyl or latex gloves.
Put the apple bites into the coconut mixture and roll around until coated.
Place all the apple bites into a plastic container, cover, and allow to set in the refrigerator for 2 hours, or over night.