In some cases, yes, powdered sugar needs to be sifted. You can use a sifter to do that. Depending on the type of icing or frosting you need, and the consistency and texture, sifting the powdered sugar helps to get all of the lumps out, making the powdered sugar finer for a smoother icing or frosting. However, we did not sift the powdered sugar in this recipe, only just stirred it thoroughly. Our icing turned out great for what we were using it for, which at the time, was to spread it over the top of this cherry coffee cake. Looks so good!