Liquids exist naturally in the environment or they are produced by machines, structure or duplicants. If one assigns an area with liquid to the Mop tool Duplicants will try to head there and turn the liquid into bottled version they can carry until no more liquid is left. Another option of producing bottled liquid is by letting Duplicants pump it into bottles by using a Liquid Pitcher Pump. Bottle Emptier are used to release the content of bottled liquids back into the environment.
Liquids puts pressure on blocks - it's natural for them to break either natural or artificial blocks below them. Liquids can also pass through natural blocks if the bottom of lake is too thin. For safety measures it's recommended to ensure at least 2 base blocks wide walls for every liquid container.