1. Place the marshmallows and water in a saucepan over medium heat. Cook, stirring often, until the marshmallows are fully melted and smooth. If you wish to add any flavouring, do so now.
2. Stir the icing sugar into the marshmallows, 1 cup at a time. Stir until the mixture becomes thick and too stiff to stir.
3. Scrape the mixture out onto a countertop dusted with icing sugar. The mixture will be sticky and lumpy, with lots of sugar yet to be incorporated. Dust your hands with icing sugar, and knead the fondant until smooth. If it is too sticky to handle, dust the fondant with a bit more icing sugar.
4. Once smooth, the fondant is ready to be used. You can roll it out, shape it, colour it, or wrap it in plastic for later use. If storing for later, be sure to knead the fondant again before using. For a full tutorial on making teapot cupcakes toppers check that out here.