To make "powdered" sugar: Simply grind coconut sugar in a coffee grinder or high-speed blender until it's finely ground, with a texture similar to powdered sugar. Measure after grinding the sugar for this recipe. (You may have to sift it to help break up clumps.)
To prepare the icing, combine all of the ingredients in a small mixing bowl and stir with a rubber spatula to squish it all together. If you find that you'd like your frosting a little smoother, add a bit of water just 1/2 teaspoon at a time, as needed to thin it out. At this time of the year, I'm guessing almost everyone's kitchen is cold enough that your coconut oil will be solid at room temperature, but if it isn't you can place this bowl in the fridge for 30 minutes to help it thicken up!
For decorating, transfer the frosting to a plastic bag fitted with a decorating tip. (I just use a plastic sandwich bag for convenience-- cut off the tip on the bottom of one side of the bag, slide in the decorating tip, then add the frosting on top of that.) Gently squeeze the bag and the frosting should easily pipe onto your favorite baked goods.