Combine butter and sugar in a large bowl; beat with an electric mixer until smooth and creamy, about 2 minutes. Add vanilla extract, orange juice, water, and orange zest; beat until blended. Add flour and pecans and mix with a spoon until blended but crumbly. Cover and place in the refrigerator until chilled, 3 hours to overnight.
Preheat the oven to 325 degrees F (165 degrees C).
Scoop up about a golf-ball-size of dough and press together into a ball. Flatten and smooth the edges, making sure the dough is firm and not flaky or crumbly, or else cookies will not rise or expand as they bake. Place on an ungreased cookie sheet. Repeat with the rest of the dough.
Bake in the preheated oven until edges are golden, 15 to 20 minutes. Cool on the baking sheet for 1 minute before removing to a wire rack to cool, 8 to 10 minutes more.
Sift some confectioners' sugar into a small bowl. Drop a cookie into the sugar, shake the bowl, flip the cookie, and agitate again to cover in sugar. Repeat with remaining cookies, adding more sugar as necessary.