Water on Grace's Island is a basic resource you need to grow plants and craft some resources.
Can't find it? Look for the Spring. It produces water every minute! Also, you can get the water as a reward for completing some tasks and adventures and buy it for crystals.
How to know when to collect it? When there appears a bucket pop-up it means you can collect water by taping on it! When there is MAX near the bucket it means that the capacity of the Sring is full and you need to collect it in order to Spring produce more water. Do you want to increase the capacity of the Spring? Tap on it and press the Upgrade button.
Don't know how much water you have? Just look at the top of the screen where the little window with a water count is located.
P.S. After level 5 you can purchase another well to get more water😉