Oh, this is a really good riddle! Grandma’s Christmas recipes are full of tradition and secrets. If the cookie was covered with powdered sugar, but not the classic “Snowball” (often called a Nut/Butter Snowball or Russian Tea Cookie) or “Wedding Cookie”, then it is probably one of the following similarly popular Christmas cookies:

🎄 Possible Christmas Cookies (Coated with Powdered Sugar)
Category Possible Cookies (in Hungarian/German) Characteristics and Why Do You Remember Them?
Jam City Cookies Linzerkarika/Linzerkeksz (in a very small version) Characteristic: Two small cookies, glued together with jam, the top biscuit with a hole in the middle.
Shaped Cookies Vanilla croissant (Vanillekipferl) Characteristic: Crescent-shaped, usually made with almonds or walnuts, rolled in vanilla icing sugar while still hot. Very crumbly!

Chocolate Cookies Isler (very small, rounded version) Characteristic: Two small, crumbly doughs glued together with chocolate/jam, decorated with icing sugar on top instead of chocolate glaze.
Honey/Spicy Cookies Lebkuchen/Mézes puszedli (softer versions) Characteristic: Spicy flavor, round or flatter shape. Sprinkled or coated with icing sugar after baking.
Egg White Cookies Meringue/Meringue (harder, small size) Characteristic: Made with egg white and sugar, extremely light, but not the classic cookie category.
🤔 Questions for Clarification:
How to find the grandma’s secret, it would help if you could answer the following:

What was the main flavor of the cookie? (Vanilla, walnut/almond, chocolate, jam, honey/spiced?)
What was the texture? (Very crumbly/brittle, chewier, hard?)
What was the shape? (Ball/sphere, crescent/roll, disk, maybe pointed/conical?)
As soon as I get some clues, I’ll try to find the perfect retro recipe!