Preheat oven to 350°. In a large bowl, cream butter and sugar until light and fluffy. Beat in eggs and vanilla. In another bowl, whisk flour, baking powder, salt and nutmeg; gradually beat into creamed mixture.
Shape level tablespoons of dough into balls; place 2 in. apart on ungreased baking sheets. Flatten slightly with the bottom of a glass. Bake until edges are light brown, 8-10 minutes. Cool on pans 2 minutes before removing to wire racks to cool completely.
Meanwhile, spread crushed candies onto a parchment-lined baking sheet. Bake until candy is melted, 5-7 minutes. Cool completely on pan on a wire rack. Break into pieces.
Spread icing over cookies; sprinkle with wafer crumbs. Arrange broken candies to make campfire flames. For logs, break pretzel sticks in half. Place 3 halves, broken edge down, in the wet icing. Hold in place until set.
