Thirst is one of the main causes of death at the beginning of the game. Finding and maintaining easy access to drinking water is essential to long term survival.
Fresh water is blue in colour and doesn't spread as much as in Minetest. Water sources can be made by collecting rain water, melting ice or snow blocks or placed using a filled water pot.
Salt water is green and can't be used for soaking or drinking. It spreads like normal water in Minetest; flowing water with two adjacent water sources will become a water source.
Flowing water in game, fresh or salty, will not support the weight of the player. This means water elevators don't work in Exile. It also means flowing water is a possible hazard as you can take damage from hitting the bottom of a water fall.
Sources of Fresh Water
Water drops will form on the ceiling of caves and rooms underground. Left clicking them will provide a small increase to your thirst level. Drinking them regularly will help keep you alive, but they're not very predictable.
Water puddles form from rain and seepage from wet blocks. For a puddle to form, you need a hole completely surrounded by blocks. When it's raining, there's a chance the hole will fill with water. There's also a chance the hole will fill with water from seepage of blocks above or around the hole. This means you can produce a water source by stacking wet blocks around a hole. The more wet blocks, the more chances of seepage to kick in and produce a water source. This can be a slow process, but it's possible to come across puddles that formed naturally in areas with wet ground.
Be careful not to have salty wet blocks around your hole. Salty water can also seep through blocks forming salty water puddles. You can't drink them obviously.
You can find pools of fresh water underground. There are plans to add fresh water pools on the surface as landmarks, but it hasn't yet been implemented.
Rain water is the most common source of water. Clay or wooden water pots will collect rain water if left out in the rain. Once you have a few, it's usually pretty easy to maintain a reliable source of water.
Snow & Ice
Snow blocks will form when it is snowing outside. Eating snow was added in release 0.3.8/0.2.11 as a way to increase your thirst bar. It saps your energy badly and lowers your body temperature. As such it can be used to treat a fever. It's not a good long term strategy for water but works well to keep you alive in an emergency.
Half blocks can be combined to full blocks in the Mixing Spot. Full blocks of snow can be placed on a clay or wooden pot to melt into the pot.
Ice blocks form in salt water when it's cold out. These blocks can be converted to snow blocks in the Mixing Spot. This is a reliable source of water as you can collect ice blocks and store them in chests (unrealistic but possible currently). This provides an easy way to store water for future use.
Wet blocks contain a water source that can be drained. See Water Pools above.
Pots and Bottles
Water sources can be picked up and stored in water pots and glass bottles. Water pots will fill if left out in the rain and snow will melt into them. Glass bottles have too narrow an opening to fill from rain or melted snow so you need to fill them from water sources or from other bottles or pots. You can right click a water bottle or pot on another to transfer the water between them. This works for both fresh and salty water.
Currently, drinking from bottles or water pots also provides a way to insure the water is safe to drink. Water from bottles and pots is considered purified. Future changes will require water to be purified through boiling or treatment to become purified.
Illness from Water
Drinking water from puddles and pools has a chance of being contaminated. You can get food poisoning or parasites from contaminated water.