Step 1: In a medium bowl, whisk together the all-purpose flour, baking powder, and salt. Set aside.
Step 2: In a large mixing bowl, using an electric mixer, cream together the softened butter and granulated sugar on medium speed until light and fluffy, about 3-5 minutes. Scrape down the sides of the bowl as needed.
Step 3: Beat in the egg and vanilla extract until well combined and smooth.
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 disk, wrap tightly in plastic wrap, and refrigerate for at least 1 hour (or up to 2 days) until firm. This is crucial for preventing the cookies from spreading.
Step 6: Preheat your oven to 375°F (190°C). Line two large baking sheets with parchment paper or silicone baking mats.
Step 7: On a lightly floured surface, roll out one disk of chilled dough to about 1/4-inch thickness. 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.
Step 8: Gather any dough scraps, gently re-roll them once, and cut out additional cookies until all the dough is used.
Step 9: Bake for 8-10 minutes, or until the edges are lightly golden. Baking time will vary based on cookie size and oven. Let cookies cool on the baking sheets for 5 minutes before transferring to a wire rack to cool completely.
Step 10: While cookies cool, prepare the royal icing. In a large bowl, combine sifted powdered sugar and meringue powder. Gradually add warm water, 1 tablespoon at a time, mixing on low speed until combined. Increase speed to medium-high and beat for 5-7 minutes, or until stiff, glossy peaks form. Cover with a damp cloth to prevent drying.
Step 11: Divide icing into separate bowls and mix in gel food coloring as desired. Transfer icing to piping bags (or zip-top bags with a tiny corner snipped).
Step 12: Outline cooled cookies with a slightly thicker consistency of icing. Let outline set for 10-15 minutes. Thin some icing with a few drops of water until it has a pouring consistency (test by dragging a spoon through; the line should disappear in 10-15 seconds). Flood the outlined cookies and spread evenly with a toothpick.
Step 13: Allow decorated cookies to dry completely, ideally overnight, before stacking or storing.