Whisk flour, baking powder and salt together in a small bowl.
Beat the sugar and butter in a large bowl with an electric mixer on medium speed, until light and fluffy, about 5 minute.
Beat in the egg, then the vanilla and orange zest. Add the flour mixture and mix on medium-low speed until mixed together.
Divide the dough in half, pat into 2 round discs about 1/4 inch thick, wrap in plastic wrap, and refrigerate until firm, about 1 hour.
Preheat oven to 350 degrees F. Line 2 baking sheets with parchment paper.
Let the dough sit at room temperature for a few minutes, and then roll out 1 disc of dough at a time, between 2 pieces of parchment paper, until 1/8 inch thick. Cut out shapes with cookie cutters, and arrange about 2 inches apart on the prepared baking sheets.
Bake until the cookies are golden brown on the bottom, 10 to 12 minutes. Let the cookies cool on the baking sheets, and then transfer to a wire rack; let cool completely.
Gently gather any scraps of dough into a ball and press back together into a disc; wrap in plastic wrap and refrigerate the disc until firm enough to roll, about 1 hour. Cut out as many cookies as possible and bake.
For the frosting: Beat the confectioners’ sugar, meringue powder and 1/3 cup water with an electric mixer on medium-high speed, in a large bowl, until stiff peaks form. Add the food coloring if using.
Decorate the cookies with the icing; top with sprinkles if using.