Put the whole package of Oreos into a food processor and pulse until you have fine oreo crumbs.
Transfer the crumbs to a mixing bowl, add in the softened cream cheese and vanilla and mix with an electric mixer until just combined. The mixture will stick together when it’s all combined.
Press the Oreo mixture evenly onto a small baking sheet. Use a spatula to smooth it out. Freeze the baking sheet for 30 minutes.
Remove from the freezer. Use various Christmas themed cookie cutters to press into the mixture, wiggling it slightly, then removing. Use your fingers to remove the oreo mixture from the inside of the cookie cutter. Set the cookies on another small baking sheet. Repeat until the entire mixture of oreo is used up.
Freeze the Oreo cookies for 45 minutes to 1 hour.
Meanwhile, melt the red candy melt wafers in a microwavable bowl in 30-second intervals at half voltage. Stir between each interval. Make sure to only heat the chocolate enough as needed to stir into a smooth consistency.
Remove a few oreo cookies at a time from the freezer, not all at once.
Place the cookies on a wire rack over a silicone mat lined baking sheet. Pour or scoop the chocolate over the top of the cookies and beat the rack down to make the chocolate spread evenly over the tops of the cookies.
The royal icing takes place until the red chocolate is set (and difficult to touch).
In a small mixing bowl, combine the powdered sugar, meringue powder, water, and beat using an electric mixer for 5-7 minutes.
Move the royal icing and decorate the cookies in a piping bag.
Sprinkle white sanding sugar over the decoration as desired. Allow the royal icing to set. Tap off the excess sprinkles once it's set.
Transfer the cookies to a platter and serve! Oreo balls should be kept refrigerated, so keep them in the refrigerator until they are served!