water (n.1)
Old English wæter, from Proto-Germanic *watar (cognates: Old Saxon watar, Old Frisian wetir, Dutch water, Old High German wazzar, German Wasser, Old Norse vatn, Gothic wato "water"), from PIE *wod-or, from root *wed- (1) "water, wet" (cognates: Hittite watar, Sanskrit udrah, Greek hydor, Old Church Slavonic and Russian voda, Lithuanian vanduo, Old Prussian wundan, Gaelic uisge "water;" Latin unda "wave").

To keep (one's) head above water in the figurative sense is recorded from 1742. Water cooler is recorded from 1846; water polo from 1884; water torture from 1928. Linguists believe PIE had two root words for water: *ap- and *wed-. The first (preserved in Sanskrit apah as well as Punjab and julep) was "animate," referring to water as a living force; the latter referred to it as an inanimate substance. The same probably was true of fire (n.).
water (v.)
Old English wæterian "moisten, irrigate, supply water to; lead (cattle) to water;" from water (n.1). Meaning "to dilute" is attested from late 14c.; now usually as water down (1850). To make water "urinate" is recorded from early 15c. Related: Watered; watering.
water (n.2)
measure of quality of a diamond, c.1600, from water (n.1), perhaps as a translation of Arabic ma' "water," which also is used in the sense "lustre, splendor."