I use powdered sugar icing: 1 cup powdered sugar, 1/4 teas. vanilla, 1 tablespoon milk.
If it's too thick, add a bit of milk. If too runny, add a bit of powdered sugar.
We usually make white (no food coloring), green, & red.
Also, sprinkles make it on to most cookies. (We top the cookies with icing and then add sprinkles while the icing is still wet.)
I make the sugar cookies (thick so they're soft). And the whole family decorates them.
Two tips: Put a bowl or plate under the cookie while you're decorating it to catch icing drips and dropped sprinkles & Don't stack the cookies on top of each other until AFTER the icing has thoroughly dried or they'll stick to each other.
Making Christmas cookies is one of our favorite Christmas traditions!