Preheat oven to 350 degrees. Line a cupcake tin with 6 paper liners, or line a 9x2 inch round cake pan with parchment and cooking spray (I just sprayed mine really well with baking spray).
Toast the pecans or walnuts on a small baking sheet until lightly browned, about 8 minutes in preheated oven. Don't skip the toasting of the nuts, it brings out such a good flavor! Let them cool, and coarsely chop.
Whisk the flour, baking powder, cinnamon, salt and nutmeg in a medium bowl. Make a big well in the center so you can see the bottom of the bowl (like a reverse volcano). Add the sugar and egg into the well and beat with a fork until combined, then add oil and vanilla and beat with fork. Stir in the dry ingredients until combined. Fold in the carrots and nuts (I keep a few carrots and nuts out to decorate).
Transfer batter into prepared cake pan or cupcake tins, and bake until toothpick comes out clean, about 15-20 minutes. Let cake cool in the pan on cooling rack for 20 minutes, then turn it out of the pan, and let cool completely.
Beat the cream cheese and butter until completely combined and smooth, stopping a couple times to scrape the bowl. Add powdered sugar and vanilla, and beat until just combined and no lumps appear.
If you made cupcakes, pipe frosting onto each cupcake, and decorate with carrots and nuts.
For round cake: cut the cake into 4 even wedges. Frost the top of each wedge with about 3 tablespoons of frosting. Stack the frosted wedges on top of each other on a flat serving plate, resulting in a 4 layer slice of cake. Cover the back side of the cake with the rest of the frosting. Decorate with additional nuts and shredded carrot if desired. Refrigerate for at least 30 minutes. Cut to serve, or grab 2 forks and dive in!