Regular sugar and powdered sugar are very different substances. Powdered sugar is regular sugar that has been industrially processed until it is extremely fine. Small amounts of cornstarch are added to powdered sugar in order to prevent it from caking. Because powdered sugar is so fine, it's ideal for making icings, frostings and candies, as well as for dusting desserts, which gives them a festive look. Regular sugar is much clumpier than powdered sugar, which makes it ill-suited for most of these purposes.

On the Other: Regular Sugar May Be Processed at Home

Regular sugar may be made into powdered sugar by grinding it in a blender or food processor with a pinch of cornstarch or potato starch. This process requires stopping and stirring often, but the end product will be usable in a number of powdered sugar recipes. While unprocessed regular sugar shouldn't be substituted for powdered sugar in most recipes, you could try dusting cookies or cakes with it instead of powdered sugar. Regular sugar has a pleasant crunch and texture that powdered sugar lacks.

Bottom Line

In a pinch, regular sugar may be substituted for powdered sugar if it is correctly processed. However, this should not become a regular habit. Home food processors cannot powder regular sugar as well as industrial food processors can. Unprocessed regular sugar should not usually be substituted for powdered sugar. Powdered sugar dissolves at room temperature, which allows it to blend into icings easily. Regular sugar doesn't dissolve at room temperature; substituting it for powdered sugar will result in grainy, lumpy icing or frosting. Other powdered sugar recipes will be similarly ruined.

Source:

Martha Stewart.com: Passover Powdered Sugar

News & Observer.com: Sweets For Your Sweet: Faking Powdered Sugar

Epicurious.com Food Dictionary: Sugar

More Information:

Charlotte Observer.com: Try Making Your Own Powdered Sugar

Cooking Light.com: Sugar

Powdered Sugar Frosting Recipe