THE POPULOUS BIBLE
C.41 Water
Water in populous the beginning is certain death for any unit who falls into it. It is possible to over come this obstacle by by using spells such as Landbridge or Flatten which if casted properly will create a patch of land over the water which units can safely pass through. Water could also be crossed with the help of Balloons and Boats. Water could also be used to the players advantage by throwing units into it's deadly depths with spells like Blast and Tornado. Also, the lava will create land when in contact with water (eg.: casting a volcano in water will create land around the casting point). Water is usually blue but in some levels it's orange or red, but it still acts as water and not lava (only the colour changes). The best spell to sink land is using flatten on water or erode on terrain nearby water. Damaged land (ex.: by lava) is not sinkable until the terrain gets fertile again.
Any single unit or shaman will die if drowns - this includes magical shielded or bloodlusted units. Stone heads and some objects like reincarnated pillars can not be sunk. To build a boat hut, there is the need of nearby water - but you can not build it it small puddles.
In this image you can see a boat hut (that needs to be built near water) being sank to water after blue's shaman casts the spell erode. There is also a boat on the beach - the only vehicle that travels only through water - and a balloon, which can travel above water and land.