It comes from the local water tower which tries to keep the water level within the tower at a fixed height. This results in fixed water pressure for users since pressure is only dependent on height. They have a big pump that they use to pump water up to do this.
That water comes from the local water treatment plant, which treats either surface water (rivers/lakes/etc) or groundwater (aquifers) or in rare cases salt water (salty aquifers/oceans) to remove contaminants and microbes (using filters, UV light, etc), and add stuff like fluoride (to protect teeth) and chlorine (to continue killing microbes).
After you use water, it goes to a wastewater treatment plant which uses filters and bacterial digestion to remove organic and inorganic solids from the water, before killing the bacteria with chlorine, and then waiting for the chlorine levels to fall back within acceptable ranges before releasing the wastewater back into the ocean/river/lake/aquifer.
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