Preheat the oven to 350oF. Grease and flour your baking pan(s).
Sift the dry ingredients into a large bowl and mix together until blended. Separately, whisk together the water, oil, vinegar, and vanilla. Pour the wet ingredients into the bowl of dry and stir gently until mixed.
Once smooth, pour the batter into the pan(s) and bake for 20-30 minutes or until an inserted toothpick comes out clean and the cake edges have pulled away from the pan.
Separately, melt the chocolate chips in a double boiler over low heat. Once completely smooth and melted, add the dairy-free milk a little at a time. Finally add the peppermint extract. If too thick, add a few tablespoons more of dairy-free milk at a time, until the desired consistency is reached. Let icing and cake cool completely before frosting.
After frosting, sprinkle with peppermint candies for decoration, if desired.