Summary:
Home cooks most generally use the term frosting and icing interchangeably. This can cause confusion.
In order to reduce that confusion I like to make a distinction between the two on my website.
Frosting
Frosting is a fluffy, thick concoction that will hold its shape. You can pipe decorations with it like you see on cakes.
Even though it holds a shape it stays soft and keeps its creamy texture.
Home cooks most generally use the term frosting and icing interchangeably. This can cause confusion.
In order to reduce that confusion I like to make a distinction between the two on my website.
Frosting
Frosting is a fluffy, thick concoction that will hold its shape. You can pipe decorations with it like you see on cakes.
Even though it holds a shape it stays soft and keeps its creamy texture.
There are as many variations of frosting recipes, as there are cookie recipes. One of the most popular is butter cream.
Even within the butter cream category there is no one definitive recipe.
It seems that every country that can get its hands on butter has its opinion of what butter cream frosting should be. Some are made with eggs and butter. Some varieties you have to cook sugar to a softball stage.
There are others that use shortening or a combination of shortening and butter. Still others don't use butter or shortening at all but another substance such as peanut butter.
A simple butter cream is just butter, sugar, flavoring and a liquid beaten and beaten until it is light and fluffy. It can be flavored with most any flavoring and colored any color during the beating stage.
After beating, other ingredients such as dried fruit, nuts or melted chocolate can be folded in.
Icing
Icing is normally much thinner than frosting and in this state will not hold shapes. Because it's more liquid it flows easily and thins out filling in nooks and crannies.
What differentiates icing from frosting is that as icing dries it becomes smooth and will harden when completely dry. This makes it perfect glue for cookie construction projects, such as a gingerbread house.
For the cookie decorator that's not handy with a piping bag icing is the ideal cookie decorating medium.
Just like frosting there are hundreds and hundreds of icing recipes and recipe variations. An icing recipe can be as simple as powdered sugar mixed with a liquid to more complicated meringue varieties.
One of the better known meringue variations is Royal Icing. Depending on the amount of liquid used Royal Icing can be piped and will hold shapes like frosting but it will harden as it dries.
So is it icing? Or is it frosting?
In my humble opinion it boils down to one thing. If it stays soft (within reason) it's frosting. If, when it dries, it hardens then it's icing.