In the bowl of a stand mixer, whisk together meringue powder and water until a slight foam forms.
With the mixer on low, gradually add in confectioners’ sugar and vanilla. Turn the mixer up to medium-high, mix until icing becomes light and airy, about 2 minutes. If the mixture is too thick and not mixing well, add more water, 1 teaspoon at a time. The icing should still be very thick at this point.
When ready to use, separate into bowls and add coloring. Thin the icing using a spray bottle, water dropper, or teaspoon until it has reached the desired consistency.
*Stiff consistency for flowers or other decoration with detail - add no additional water.
*Piping consistency for writing and other decoration with less detail - add enough water where the icing will fall off a spoon into a mound that holds its shape.
*Piping consistency for flooding - add enough water that when a toothpick or knife dragged across the surface, the icing comes back into a flat surface within 15 seconds.
Store unused icing in an airtight container covered with plastic wrap (plastic wrap should be touching the surface) in the fridge for up to a week. Makes enough to frost about 3 dozen cookies