In a medium saucepan, combine water, butter, salt, and sugar. Bring to a boil over high heat, stirring occasionally. Once boiling, reduce heat and stir in flour until a smooth dough forms.

Let the dough rest for 4-5 minutes. Add the egg and vanilla essence, mixing until smooth.

Preheat your air fryer to 375°F (190°C) and spray the basket with nonstick cooking spray.

Transfer the dough into a piping bag fitted with a large star tip. Pipe small churro shapes into the basket, ensuring they are spaced apart.

Lightly brush the churro tops with melted butter and air fry for 10-12 minutes until golden brown.

Mix white sugar and cinnamon in a bowl. Toss cooked churro bites in this mixture until coated.

Serve immediately, optionally with dipping sauces like warm chocolate or honey.