Pull off the tentacles and head. Reach into the body and pull out the hard quill and discard. Peel coloured skin off from the body. Rinse under cold water; cut the body into rings. Cut the tentacles from the head and discard the head.
Place the onion, garlic, wine and water in a medium sauté pan. Bring liquid to a boil. Add the prepared squid (rings and tentacles). Turn heat down to low. Cover and simmer for 1 hour.
While squid is cooking, prepare the dressing. In a medium bowl, whisk together the shallot, 2 garlic cloves, olive oil, lemon zest, lemon juice, salt and pepper.
Drain the cooked squid and let cool slightly. Add the squid to the dressing and toss to coat. Cover and let marinate for at least 15 minutes before serving.