In addition to what everyone else said, water towers also are important because they maintain constant positive pressure in the water system.
Imagine if you only use electric pumps to maintain pressure in a system, and one day the power fails. The water system loses pressure. If there are any minor leaks or imperfect valves, contaminants could back flow into the drinking water supply, which is obviously no bueno.
Having a large amount of water in the tower means that even if the electric system fails, the water system would still maintain positive pressure.
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