Agriculture and fishing have different needs for water, as do manufacturing industries, cities, and wildlife. Water allocation is the process of distributing water supplies to meet the various requirements of a community.

Determining how to allocate water supplies requires the consideration of certain factors, including the source of the water and methods for obtaining it. The cost of the water supply and water treatment systems are also taken into account, and the intended uses are reviewed. Water use is classified by whether it is an instream or a withdrawal use and by whether it is a consumptive or nonconsumptive use. Instream uses include navigation, hydroelectric power, and fish and wildlife habitats, while withdrawal uses remove water from the source. Consumptive uses make the water unavailable, either through evaporation or transpiration, or through incorporation into products or saltwater bodies. Water withdrawn but not consumed can be treated...