It may stop the burning becoming worse. The inner flesh is getting burned by the outer flesh getting too hot so if you can cool down the outer flesh before it burns the inner it will make the burn smaller. Also you may still have hot things on your skin and in the pores. This is more relevant when getting scolding water over you or embers from a fire.
Cold water does indeed make it feel better as well. But it can actually make the burn worse. If it is too cold it may damage the skin and flesh even more through frost bites. This is essentially the same as a burn from a medical point of view. Due to the burn it can be hard to notice that you get frost bites. So you should avoid ice. Cold is a relative term but the water should not be so cold that you can not hold your hand under it for a few minutes in normal conditions. If you are treating someone elses burns hold your hand under the water with them to feel how cold it is as you can not rely on their sensation of heat and cold.
The biggest killer when it comes to burns is infections. Again the water may help as it is probably cleaner then whatever dirt you have on your skin and in the air. But it can also introduce more bacteria to the wound. Warmer waters tends to have more bacteria then cold water. But this is something to consider when treating a burn.
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