In a large mixing bowl, combine the sifted powdered sugar and meringue powder.
Add the warm water and vanilla extract to the dry ingredients.
Using an electric mixer on low speed, mix the ingredients until combined, then increase to high speed and beat until stiff peaks form, about 5 minutes.
Divide the royal icing into separate small bowls depending on how many colors you want to use.
Add gel food coloring to each bowl and stir until the color is fully incorporated.
Adjust the consistency of the icing by adding a few drops of water to thin it for flooding or a bit more powdered sugar to thicken it for outlining.
Transfer the icing into piping bags fitted with small round tips for outlining and flooding your sugar cookies.
Outline the edges of each cookie with thicker icing and let it set for 10 minutes.
Flood the inside of the outlined area with thinner icing and use a toothpick or scribe tool to spread the icing evenly and create designs.
Allow the decorated cookies to dry at room temperature for at least 4 hours or until the icing is completely hardened.