Lay two sheets of plastic wrap on a work surface. Transfer half of the dough onto each sheet and shape into a disk about 1/2 inch thick. Wrap dough in plastic and chill until firm enough to roll and hold its shape, about 1 hour.

Line 3-4 baking sheets with parchment paper.

Lightly flour a work surface and rolling pin. Remove one disk from the refrigerator and remove the plastic wrap. Roll the dough to about 1/8 inch thick. Cut out cookies using any shapes you like. Transfer cookies to the prepared baking sheets, spacing them about 1 inch apart. Gather the scraps, reroll, and cut again. Dust the cookie cutters with flour if dough starts to stick.

Preheat the oven to 350°F.

To keep the true shape of the cookies, chill on the baking sheets for 10 minutes while the oven preheats. Meanwhile, continue with the second disk of dough. If the dough starts to get too soft to cut, chill it again for a few minutes.

Bake two pans of cookies on upper-third and lower-third racks of oven for 5 minutes. Switch pan positions. Continue baking until cookies are firm to the touch and light golden brown around the edges, about 5 minutes.

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

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

Make the royal icing: Sift the powdered sugar into a stand mixer bowl and add the meringue powder. With mixer on low speed, add the water, 1 tablespoon at a time, until combined, scraping 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 the whisk is lifted, 3-5 minutes. If the icing is too thick, add 1 tablespoon of water. If it falls off the whisk, add 1/4 cup sifted powdered sugar. Once icing is ready, divide it into three small bowls. Leave one bowl white, stir red coloring into the second, and green into the last.

Transfer each icing to a piping bag fitted with a small round tip.

Use white to pipe dots for eyes and a mouth. Make a zigzag or scalloped line across the hands and feet. Add some buttons.

Use red and/or green to pipe in details such as additional buttons, bow ties, and clothes for people and a collar for dogs. Add stripes, zigzags, dots, or hair for extra decoration.

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