In a medium bowl, whisk together the flour, baking powder, and salt; set aside.

In a large bowl, cream together the softened butter and granulated sugar until light and fluffy. Beat in the egg and vanilla extract until well combined.

Gradually add the dry ingredients to the wet ingredients, mixing until just combined and a soft dough forms. Divide the dough in half, flatten each half into a disk, wrap in plastic, and chill for at least 30 minutes.

Preheat your oven to 375°F (190°C). On a lightly floured surface, roll out one disk of chilled dough to about 1/4 inch thickness. Use Christmas-themed cookie cutters to cut out shapes.

Place the cut-out cookies on a baking sheet lined with parchment paper. Bake for 8-10 minutes, or until the edges are lightly golden. Let them cool on the baking sheet for a few minutes before transferring to a wire rack to cool completely.

In a large bowl, combine the powdered sugar and meringue powder. Gradually add warm water, one tablespoon at a time, mixing on low speed with an electric mixer until a smooth, thick icing forms. If desired, divide the icing into separate bowls and tint with food coloring.

Transfer the royal icing to piping bags with fine tips. Decorate the cooled sugar cookies with festive designs. Allow the icing to dry completely before storing.