To decorate the cookies, you can outline the cookies with icing or spread the icing over the entire cookie. If you’re using white icing, spoon part of the icing into a decorating bag fitted with a small round tip. Pipe the icing onto the cookies in the desired design.
Divide the remaining icing into a separate bowl for each color desired. Add color as desired using paste food coloring. Slowly stir just enough water into each bowl of icing to make “flow-in” icing that is still thick but that flows into a smooth surface after stirring. Add water a little bit at a time so you don’t get the icing too watery. If it’s too watery it won’t dry properly and may run into the other colors on the cookie.
Pipe the desired colors of icing to cover the areas within the white outline, or to completely cover the cookie. Use a wooden pick to spread icing into corners and hard-to-reach areas. If you are going to sprinkle with colored sugar or candy sprinkles, add the sugar or sprinkles while the icing is still wet.