In a large bowl, cream together the softened butter and granulated sugar until light and fluffy.

Beat in the eggs one at a time, then stir in the vanilla extract.

In a separate bowl, whisk together the flour, baking powder, and salt.

Gradually add the dry ingredients to the wet ingredients, mixing until just combined.

Divide the dough in half, flatten each half into a disc, wrap in plastic wrap, and refrigerate for at least 30 minutes.

Preheat your oven to 350°F (175°C). Line baking sheets with parchment paper.

On a lightly floured surface, roll out one disc of dough to about 1/4-inch thickness. Cut out desired shapes with cookie cutters.

Place cookies on the prepared baking sheets, about 1 inch apart.

Bake for 10-12 minutes, or until the edges are lightly golden.

Let cookies cool on the baking sheet for a few minutes before transferring them to a wire rack to cool completely.

To make the royal icing, whisk together powdered sugar and meringue powder in a medium bowl.

Gradually add the warm water and vanilla extract, beating until smooth and stiff peaks form. Add more water if needed for a thinner consistency.

Decorate the cooled cookies with royal icing and sprinkles as desired. Let the icing dry completely before stacking or serving.