There are many recipes for edible play dough or candy clay. This recipe uses Almond Bark as its base, which is just a brick of white chocolate. What you do is take half of the Almond Bark and chop it up finely. Place it in a microwave safe bowl. Melt it in the microwave by starting at 1 minute. Take it out and stir and place it in for 30 seconds at a time taking it out and stirring each time. Once the almond bark is melted add 1/3 cup of Karo syrup or any other light corn syrup. Mix it really good and let it cool. I find that if you take a cookie sheet that has a bit of a lip helps cool it faster, but put down some wax or parchment paper so it doesn't stick. It takes awhile to cool, I usually let it cool overnight so I'm not sure exactly how long it takes. This is a great activity to do with a bunch of kids.
You can do this whole thing with Wilton candy chips that comes in a lot of different colors too. They are significantly more expensive than the almond bark and you'd have to buy all the different colors you wanted. It takes 1/3 cup of Karo syrup for each package.
I've tried this with a bunch of different types of chips, but it doesn't seem to work that well. The white chocolate chips work the best but real chocolate chips or things like butterscotch chips make the dough too hard. Perhaps adding more Karo syrup would help it, but I didn't really mess around with it that much.