Ok, a lot of people here are giving true answers, but the *real* reason water is so important and can do all these things people are mentioning is because each molecule of water is just slightly polar. The oxygen side is slightly negatively charged and the hydrogen part is slightly positively charged.
This allows water to be attracted to itself (allowing for surface tension), makes things dissolve into it easier, allows it to absorb and release large amounts of energy without changing temperature much, and all sorts of other things!
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