In a large mixing bowl, whisk together the powdered sugar and meringue powder until well-combined. Ensure there are no lumps.

Gradually mix in water and vanilla extract while stirring. Beat the mixture with an electric mixer for about 5 minutes until glossy and smooth.

Check the consistency; it should be thick yet spreadable. Adjust with water or powdered sugar as needed.

Divide the icing into bowls and add gel food coloring to each, mixing until vibrant shades are achieved.

Transfer colored icing into piping bags or use a spatula for decoration. Create outlines and floods for designs.

Allow cookies to set undisturbed at room temperature for about 6-8 hours for icing to harden.