Sift the flour, baking powder, and salt into a medium bowl.

Place the butter and sugar in a large mixing bowl. Beat with a hand mixer on low speed to blend, then increase speed to medium and beat until soft and light. Add the egg and milk, followed by the flour mixture, beating after each addition until blended, and scraping down the sides of the bowl as needed.

Lay two sheets of plastic wrap on a work surface. Scrape half of the dough on each wrap and shape into a disk about 1/2-inch thick. Wrap the dough in plastic, then chill until firm enough to roll and hold its shape, 30-60 minutes.

Line two or four baking sheets with parchment paper.

Lightly flour a work surface and rolling pin and roll one dough disk to 1/4-inch thick, lifting and re-flouring the surface and rolling pin as needed to prevent sticking. Cut out cookies using any shapes you like. Transfer cookies to the prepared baking sheets, spacing them about 1 inch apart. Dust cookie cutters in flour if the dough starts to stick. Gather the scraps, re-roll, and cut again.

To help the cookies retain their shapes, refrigerate on the baking sheets for 10-15 minutes while oven is preheating. Meanwhile, continue with second disk of dough. If dough starts to get too soft to cut, chill it again for a few minutes.

Preheat the oven to 350°F.

Bake two pans of cookies at a time on upper-third and lower-third racks of oven, switching pan positions halfway through cook time, until cookies are light golden brown around the edges, 10-13 minutes.

Check to see that cookies are done. Remove from oven or add time as needed.

Use a wide spatula to transfer cookies to cooling racks and let cool for about 15 minutes.

Make the royal icing: Sift the powdered sugar into a stand mixer bowl fitted with a whisk attachment. Add the meringue powder. With mixer on low speed, add water, 1 tablespoon at a time, until combined, scraping the bowl as needed. Increase speed to high and beat until icing is shiny, thickened, and smooth and holds a soft peak that flops over when whisk is lifted, 3-5 minutes. If the icing is too thick, add an additional tablespoon of water. If it falls off the whisk, add an additional 1/4 cup sifted powdered sugar. This is your outline icing.

Transfer one quarter of the icing to a small bowl and one quarter in another. Leave one bowl white and stir gel color into the other. Make the filling icing: Add the water, 1 teaspoon at a time, to the remaining icing in the stand mixer bowl, mixing on low speed. When the whisk is lifted, icing should droop and then slowly fall off. Divide the icing between two small bowls. Leave one bowl white and stir gel color into the other. Transfer each icing to a piping bag fitted with a small round decorating tip. Use your smallest tips (ideally, #3) for outline icing and slightly larger (ideally, #5) for filling icing.

Pipe the outline icing over a few cookies at a time. To line with sprinkles, sparkling/sanding sugar, or cake sparkles, pour some onto a flat plate and invert the outlined cookies onto decor so sprinkles will stick to the icing. Use the outline icing to add details like faces. Finish with sugar pearls, if desired, for additional detailing.

To fill in a cookie completely with color, outline the cookie in icing first, then squeeze in filling icing, using the same color or a different one. Carefully spread the filling icing with a toothpick if needed. Top with sprinkles if desired, or invert cookies onto plates of sprinkles, sparkling/sanding sugar, or cake sparkles to cover completely.

To stripe a cookie, choose one color and outline and fill stripes. Choose another color and outline and fill in the blanks.

Icing takes a minimum of 30 minutes to 1 hour to completely set, but cookies can be eaten at any time. If transporting cookies, let icing set completely, about 1 hour.