A water skin is an item that waterbenders use to store water for later use. It's useful because it removes the basic limitation of waterbending which is the lack of a water source, everywhere you go, to do bending.
A water pouch can hold up enough water to generate five (5) water arcs, which means the waterbender is not defenseless when far from a source of water. Once the pouch is empty you need to refill it like a bucket.
As of update a5.0, players can craft water skins with leather and waterbending scrolls. To craft a water skin, put a waterbending scroll in the center of the 3x3 crafting grid, then add four pieces of leather adjacent to the scroll.
Stronghold Libraries, Abandoned Mineshafts, and Dungeons have a 24% chance of containing water skins, along with other AV2 items.