Preheat your oven to 350°F (175°C) and line baking sheets with parchment paper.
In a mixing bowl, combine flour, baking powder, and salt. Set aside.
In a large bowl, cream together softened butter and granulated sugar until light and fluffy using an electric mixer.
Beat in the egg and vanilla extract until well combined.
Gradually add the flour mixture to the butter mixture, mixing until just combined.
Divide the dough into two portions, wrap each in plastic wrap, and chill in the refrigerator for at least 30 minutes.
On a floured surface, roll out one portion of the dough to about ¼ inch thick and use cookie cutters to cut out shapes.
Place the cookies on the prepared baking sheets, spacing them a few inches apart. Bake for 8-10 minutes or until the edges are lightly golden.
Let the cookies cool on a cooling rack.
Prepare the royal icing by mixing powdered sugar, meringue powder, and water in a bowl until stiff peaks form. Adjust water for desired consistency.
Divide the icing into bowls and add food coloring if desired, then transfer colored icing into piping bags.
Decorate the cookies using the royal icing as desired. Allow to dry completely, which may take several hours.
Once the icing is fully set, serve or store the cookies in an airtight container.