What is the difference between fondant icing and icing sugar?

Icing sugar is finely ground sugar, which when added to whisked egg whites makes Royal Icing.

Royal Icing sugar is finely ground suger pre-mixed with dried, pasteurised egg white. This is good if you want to avoid the "risk" associated with raw eggs. However, the ratio of egg white to sugar is fixed and the only adjustment which can be made is to add water (or lemon juice/glycerine) to vary the texture.