Why is there cornstarch in powdered sugar?
It's to prevent caking. See, for example, the second FAQ on Domino Sugar's website:


  It is not recommended to substitute confectioners sugar for granulated
  sugar. Since confectioners sugar has a much finer texture, and it
  contains a small percentage of cornstarch to prevent caking,
  substituting can give you unexpected results.


Many shredded cheeses include corn starch for the same reason.