Added water to something, or diluted or weakened something (like watering down a story makes it less interesting).
From Old English 'wæter' with Germanic roots. The figurative sense of 'weakening' came from literally diluting liquids with water, making them less potent.
When stock is 'watered'—meaning shares are issued without real value backing them—it comes from 18th-century cattle fraudsters literally watering cows before weighing them for sale.
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