In a large bowl, use an electric mixer to combine the sugar, meringue powder, and a scant 1/2 cup water on low speed. Beat until the mixture is fluffy yet dense, 7 to 8 minutes.
To thin the icing for flooding (filling in areas with a thin layer of icing), stir in additional water, 1 teaspoon at a time. Test the consistency by lifting a spoonful of icing and letting it drip back into the bowl; a ribbon should remain on the surface for 5 to 7 seconds.
To tint icing, dip a toothpick or wooden skewer into food coloring, and gradually mix it in until the desired shade is reached.