Water & terraforming
Water physics is the deepest system in the game. Here are the numbers.
Five kinds of liquid
Fresh Water hydrates and is the only kind where sparkling ripples appear. Ocean Water, Muddy Water and Hot Spring Water do not spawn ripples; Muddy Water also does not hydrate. Lava does not hydrate, damages Ditto on contact, and turns into Black Rock when hit with Water Gun. Each is produced from a corresponding vending-machine drink.
After completing Piplup's request with Paldean Wooper in Bleak Beach you can place and remove liquid freely: hold Y to suck in, ZR to release, ZL to set the water level.
How water spreads
On flat ground with no drops nearby, water spreads into a circular puddle roughly 6 tiles out. Funnelled into a trench it runs about 25 blocks; lava runs about 12 and moves much slower. Water can also slip through diagonal gaps, so it effectively flows in all 8 directions.
A drop changes everything. Place a source within 4 tiles of any cliff and the water stops spreading and beelines for the edge in a straight two-tile-wide line. If several drops are equidistant it heads for all of them at once. Lava behaves differently: it aims for the drop but starts spreading again from the second tile, so in broken terrain it covers more ground than water despite its shorter reach.
Sources and levels
A primary source is where the water begins — remove it and everything downstream vanishes. Where falling water lands it creates a secondary source that behaves exactly like a primary one, except removing it does not permanently kill the flow.
Holding ZL switches to a low water level: the puddle shrinks to about 7 tiles wide (5 for lava), trench distance drops to 12 (6 for lava), and — usefully — low-level water never beelines for a cliff. It always spreads in a circle instead, which makes it far easier to control.