Water is non-uniform good/service.
Drinking water is sometimes a service and sometimes a good (bought in steady supply or bought in discrete units) and is often purified, treated, and delivered (or not). It is often priced.
Water for other uses is a different animal, and is often un-priced or underpriced.
A major issue is also that allocations or changes in use across sectors are far from efficient.
Water is all too often poorly managed at the IWRM level.