Start with at least two colors of rolled out fondant and at least two cut-outs. One cut-out should be a smaller size.
Cut the base using the larger cut-out and then cut the overlay shape using the smaller cut-out.
Brush the back of the smaller cut-out with water and attach to the base shape. Be careful not to use much water or the fondant decoration can slide around rather than staying in one place. If using colored fondant, this will leave a tinted residue if it slides.