In a medium bowl whisk the egg and stir in the milk. Trim any fat away from chicken. Cube chicken into bite size pieces. Place chicken in milk mixture,and cover. Let it 'marinate' for 2-4 hours in the fridge. This will make the chicken very nice and tender. In a gallon size resealable baggie combine flour, powdered sugar, salt and pepper. Seal and shake to combine. Place about 2 inches of oil in a medium deep pot. Over medium high heat (more towards the high side) heat oil until hot. If using a thermometer let the temperature reach 375°. If you don't have a fancy gadget like most people, I always test my oil by dropping a few drops of water into it. You want it to sizzle and not pop too much. Adjust your heat if necessary. Using a fork or tongs remove cut chicken from milk mixture and place in the flour mixture. Seal and shake until nuggets are completely coated. Place about a 6-8 nuggets into hot oil and let them cook until golden brown, turning half way through once the edge of your chicken starts to turn white. About 1 minute each side. Always double check to see if any chicken you make is cooked through. I always just make a tiny cut to see if it's pink. Remove and drain on a paper towel. Repeat until all nuggets are cooked. Serve with your favorite sauce!