Water is a crucial nutrient. In fact, a very large percentage of your body is made up of water (it is the most abundant nutrient in almost all parts of your body). Water is necessary for digestion, thus making all other nutrients consumed through your diet reliant on it in order for your body to make use of them. Water can be found in common foods, or taken in directly (it is likely that to consume a healthy amount it is necessary to take water in directly as well as in food).
If you feel thirsty, then you are already dehydrated. Whether you're trying to lose weight, build muscle, or keep from catching a cold you should drink as much as you can (comfortably). Drinking makes you feel full, so if you drink water (which has no calories or fat), you're helping promote your weight loss diet. If you're trying to build muscle and think you should be taking in more solid foods with protein instead of drinking, consider this: roughly two-thirds of muscle is made up of water. When you drink a lot of fluids, it cleans out your body. It gets rid of the germs and bacteria that could make you sick. You can recover much faster from many sicknesses if you simply drink water.