Water is the most common Liquid in all Creativerse worlds. It can be found in the shape of small lakes and rivers in nearly every surface Biomes, and it forms large bodies of water too, called Ocean biomes.
Ordinary blue Water requires at least an Obsidian Mining Cell as equipment to forage.
When player characters get/dive under water, a "bubble" meter will show up that fills itself with blue color. It will last about 10 real life seconds before the player character starts to take "drowning damage", also called drowning state. The player character's health bar will shrink quickly, and if the player character does not cut surface soon, it will be defeated and respawn at the Touchstone, while the Death Statue will be left at the place where the player character has drowned - under water.
To prevent drowning and stay under water for longer periods of time, the player can place torches under water for example which will create air bubbles to gasp for air, or the player can use healing measures - like gulping down Basic Health Potions. Mineral Water will allow player characters to stay in without drowning at all in comparison.
Water, when dropped/placed (with right-click from a quick-slot) on the ground, will usually spread to 3 blocks horizontally and 2 blocks diagonally while on the same level. It is not viscous (unlike Tar or Molasses) and can stream downwards vertically as well as over a few steps where it "multiplies" a few times until it stops.
So you can drop some water and scoop up it's extensions "infinitely" (with at least an Obsidian Mining Cell, but wearing a Lumite Mining Cell is best as it's the only Power Cell that won't lose any durabilty when foraging Water) as long as you do not take the initial drop of water, which will not only stop the extensions from being renewed, but also makes all extensions dry up completely.
The ability to multiply makes Water (in fact all liquids) an easily renewable resource.
Water (as all other liquids and crafted Blocks of Goo) can also prevent all falling damage of player characters even if is just one block deep. You can use it as some sort of "safety net" or safe landing place for jumping/falling down from very high places.
Before R30, all Creativerse-Creatures avoided all kinds of Liquids including Water, and when a player character was standing inside Water, creatures usually wouldn't do any damage but could be killed easily. But now creatures can pursuit swimming player characters through water and fight them.
Water can still "kill" Creatures (as of R32 in June 2016) if they stay under the water surface for too long - you will see bubbles rising up from them, then they will dissolve in a puff, not leaving any Loot Bags behind. Also water (as all other liquids) doesn't allow creatures nor Treasure Chests to spawn in. So when swimming or staying on a small (player-built) island within a large body of water, it is still quite safe to go afk.
Water is one of the key factors to make crops grow. Seeds of Turnips, Wheat, Crisphead Lettuce and Horned Melons will only grow into crops on tilled land , if that block of acre is touching a block of either Water, Mineral Water or Bog Water (not too many units of the latter though!).
Water has to be somewhat close to make tree Saplings grow too, however it's not necessary for it to touch the block where the Sapling is planted directly.
Water turns into wherever the environment is getting cold - so rivers can freeze from a certain point on where they enter cold biomes like snow-covered Tundras for example. Water can be cooled down by players to create Ice "infintelely" too - either when placing drops of Water into environment with very low temperatures (best on snowy Mountains, on frozen Plains, frozen Oceans, in Taigas or at high altitudes - of 150 or more) or if you simply throw Freeze Bombs at bodies of Water (one Freeze Bomb can change 7x7x3 or 4 "blocks" of Water of an ocean or lake into Ice at once).
Ice can then melt or be melted to Water again if the environment is hot enough (like on the Lava layer, in Jungles or some parts of Savannahs) or if Fire Bombs are thrown at blocks of Ice. Ice Slopes will not melt into Water no matter what, not even when placed into liquid Lava though.
Snow can currently not be melted to Water by Fire Bombs (!), but if you place Snow into the Lava layer or into other really hot environments, it will melt to Water. To melt Snow in cold biomes like Mountains, Taigas or the like, you can do so by placing enough blocks of Hardened Lava and Torches of any kind under/around blocks of Snow. Water cannot be turned to Snow (currently, as of R32 in June 2016) though.
Water can be heatened too by throwing Fire Bombs at it - which will make Water evaporate into nothingness. Very rarely it seems that Water can also evaporate when being placed into very hot biomes like the Lava layer, but usually it will cool down it's direct surroundings instead, turning liquid Lava into Hardened Lava and Hardened Lava into Igneous Rocks.