Fire requires 3 things,
1.) Fuel
2.) Oxygen
3.) Heat
Water can do 2 things to stop fire.
1.) Water can absorb a lot of heat and then turn to steam (which this doesnt realease oxygen gas that can be used to continue the fire) this will remove heat from the fire and without heat the fire cant continue
2.) Water can smother the fire. If you have enough water you can completely cover the fire area with water and not allow oxygen to get to the fire and without oxygen the fire cant continue.
Also pretty sure fire needs atmospheric oxygen (which is two oxygen molecules together, or o2) not just o.
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