1. Make the Dough:

1. In a large mixing bowl, cream the softened butter and sugar together until light and fluffy, about 2-3 minutes.
2. Beat in the egg, vanilla extract, and sour cream until well combined.
3. In a separate bowl, whisk together the flour, baking powder, baking soda, and salt.
4. Gradually add the dry ingredients to the wet ingredients, mixing just until a soft dough forms.

2. Chill the Dough:

1. Divide the dough into two portions and flatten each into a disc. Wrap in plastic wrap and refrigerate for at least 2 hours, or up to 24 hours.

3. Roll and Cut:

1. Preheat your oven to 375°F (190°C). Line baking sheets with parchment paper or silicone baking mats.
2. On a lightly floured surface, roll out one disc of dough to about 1/4-inch thickness.
3. Use festive cookie cutters to cut out shapes, and transfer them to the prepared baking sheets, spacing them about 1 inch apart.

4. Bake:

1. Bake the cookies for 8-10 minutes, or until the edges are set but not browned.
2. Let the cookies cool on the baking sheets for 5 minutes, then transfer to a wire rack to cool completely.

5. Prepare the Royal Icing (Optional):

1. In a medium bowl, whisk together the powdered sugar and meringue powder.
2. Add water 1 tablespoon at a time, mixing until the icing reaches your desired consistency (thicker for piping, thinner for flooding).
3. Divide into bowls and mix in food coloring as desired.

6. Decorate the Cookies:

1. Use piping bags or a spoon to decorate the cooled cookies with icing.
2. Add sprinkles, colored sugars, or edible glitter for festive touches.
3. Allow the icing to set completely, about 2-3 hours, before stacking or storing.