Stir together 125 g powdered sugar and 10 g water in a medium bowl with a spatula. When the mixture forms one or more semi-solid clumps or balls, start mixing with your hands.
Squeeze the clumps together and press them into any remaining loose sugar until you have one solid but dry ball of sugar with no more loose powdered sugar remaining. If you find that your ball is not able to pick up any more of the loose sugar, and there is still lots of dry/crumbly bits of sugar left in the bowl, add a few more drops of water at a time until you are able to incorporate all of the sugar into the ball. Make sure to fully incorporate all of the water you have already added before adding more. If at any point you find that the ball becomes sticky or worse, it begins to run like a liquid, it means you have added too much water. You will need to add more sugar to compensate.
With all of the sugar pressed into one solid, but dry ball, begin grating it using the large holes of a box grater set over a silicone mat or parchment-lined baking sheet. You want to use very short up and down motions on the grater to make small pieces of sugar, not long shreds. Spread the sugar bits evenly over the baking sheet.
Place the baking sheet in the oven with the light on or on the proof setting for it to dry. The drying time may vary depending on the weather/climate, but mine was completely dry in about 2 hours (my area is relatively dry). Once the sugar bits are completely dry, transfer them to an airtight container or jar and store at room temperature. Use in Belgian waffles or other baked goods as desired.