Heat oven to 350 degrees F.
Combine flour, baking powder and salt in bowl.
Beat butter and sugar in large bowl with mixer until smooth, 2 minutes. Beat in egg and vanilla until fluffy, 1 minute. Gradually beat in flour mixture on low speed, or by hand, to form stiff dough. Divide in half. Flatten each into disk. Wrap in plastic; refrigerate 1 hour.
Roll one half of dough on lightly floured surface to about 1/4-inch thickness. Cut out into shapes, using cutters. Gather scraps together and re-roll; cut out shapes using all dough. Place cookies, 2 inches apart, on ungreased baking sheet. Repeat with the remaining half of dough.
Bake in 350 degree F oven for 12 minutes or until light golden around edges. Remove cookies to wire rack to cool.
Use Meringue Powder to make Royal Icing following package directions. Divide icing in half. Thin half of icing with water, a drop at a time until consistency of sour cream, to make base coat for cookies. Save thicker icing for piping. Tint icing with food colors as desired.
Using fine-tipped paintbrush, coat cookies with thinned icing. Let stand until dry. Decorate with thicker icing, piping with pastry bag fitted with fine writing tip. Keep icing covered when not using. Make additional icing as needed. Makes 24 assorted cookies.