Step 1: In a medium bowl, whisk together the all-purpose flour, baking powder, and salt. Set aside.
Step 2: In a large bowl, using an electric mixer, cream together the softened unsalted butter and granulated sugar on medium speed until light and fluffy, about 3-5 minutes.
Step 3: Beat in the eggs one at a time, mixing well after each addition until fully incorporated. Then, stir in the vanilla extract. Scrape down the sides of the bowl as needed.
Step 4: Gradually add the dry ingredients to the wet ingredients, mixing on low speed until just combined. Be careful not to overmix.
Step 5: Divide the dough into two equal portions. Flatten each portion into a disc, wrap tightly in plastic wrap, and refrigerate for at least 1 hour, or up to 2 days.
Step 6: Preheat your oven to 375°F (190°C). Line baking sheets with parchment paper or silicone baking mats.
Step 7: On a lightly floured surface, roll out one disc of chilled dough to about 1/4-inch thickness.
Step 8: Use your favorite Christmas cookie cutters to cut out shapes. Carefully transfer the cut-out cookies to the prepared baking sheets, leaving about 1 inch between each cookie. Re-roll any dough scraps.
Step 9: Bake for 8-10 minutes, or until the edges are lightly golden. Baking time will vary.
Step 10: Let the cookies cool on the baking sheets for 5 minutes before carefully transferring them to a wire rack to cool completely.
Step 11: To make royal icing (optional), sift powdered sugar into a large bowl. Add meringue powder and vanilla extract. Gradually add warm water, and mix on low speed until smooth. Beat for 5-7 minutes, until stiff, glossy peaks form.
Step 12: If desired, divide the icing into separate bowls and tint with gel food coloring. Transfer icing to piping bags fitted with small tips.
Step 13: Decorate your completely cooled cookies as desired. Allow the icing to dry completely before stacking or storing.