Sift first 5 ingredients and cinnamon, if desired, into medium bowl. Stir chocolate in metal bowl set over saucepan of simmering water until melted and smooth. Set aside. Using electric mixer, beat butter in large bowl at medium speed until smooth and creamy, about 2 minutes. Add sugar and beat until mixture is pale and fluffy, about 2 minutes. Add egg; beat until well blended, about 1 minute. Reduce speed to low and beat in vanilla and chocolate. Add flour mixture and beat on low speed just to blend. Gather dough into ball; divide in half. Form each half into ball and flatten into disk. Wrap disks separately in plastic and chill until firm, at least 4 hours. DO AHEAD: Can be made 2 days ahead. Keep chilled. Let stand at room temperature 30 minutes before rolling out.
Position rack in center of oven; preheat to 350°F Line 2 baking sheets with parchment paper.
Working with 1 disk at a time, roll out dough between 2 sheets of waxed paper to 1/8-inch thickness for smaller (2-inch) cookies and 1/4-inch thickness for larger (3- to 4-inch) cookies. Using waxed paper prevents you from adding too much flour, which will make the cookies tough.
Using decorative cookie cutters, cut out cookies. Cold dough is much easier to work with. If it gets warm as you're cutting out the cookies, place the dough—waxed paper and all—in the freezer for about 5 minutes.
Use an offset spatula to peel away the excess dough and transfer the cookies to parchment-lined baking sheets, spacing 1 inch apart. Gather scraps, roll out dough, and cut more cookies, repeating until all dough is used. If not icing cookies, decorate with sprinkles or other sugar toppings, if desired.
Bake 1 sheet at a time until cookies are firm on top and slightly darker around edges, about 9 minutes for smaller cookies and up to 12 minutes for larger cookies. Line baking sheets with fresh parchment as needed. Cool completely on rack. Decorate cookies with royal icing if desired. DO AHEAD: Cookies can be made 4 days ahead. Store between sheets of waxed paper in airtight containers.