Preheat oven to 325. In the bowl of a stand mixer fitted with a paddle cream together the butter and sugar. Mix in egg and vanilla and scrape down the sides of the bowl.
Sift in flour and mix until combined. Do not over mix.
Roll dough between 2 pieces of parchment paper until about ¼" thickness and cut into 3" circles.
Chill cut shapes for 1 hour before baking.
Bake at 325 degrees for about 13 to 15 minutes or until edges are golden brown.
Immediately transfer to a cool, flat surface.
For the Royal Icing:
Add meringue powder and water to the bowl of a stand mixer fitted with the paddle attachment. Mix until foamy.
Add cream of tartar and mix.
Add powdered sugar all at once and cover mixer with a towel to minimize mess. Mix on the lowest speed for 3-4 minutes then add vanilla.
Mix for another 6-7 minutes or until stiff peaks form.
Separate into bowls and color before adding water to thin for piping.
Add water in ½ tsp increments, mixing thoroughly until you can draw a knife through your icing and it comes together in about 20 seconds. This is perfect for piping and filling.
Outline and flood the cookie with a solid color and then while the icing is still wet add your design of choice.