When you stay active your body will use the water stored to keep you moving. The human body is made of 70%~ water weight in muscles and other soft tissue. Without water the body is not able to live past 72h.
Now imagine your exercising. With the heart, blood flow, and constant movement the body will use the water to keep you alive. You will also have more energy, focus, endurance, strength, and stamina when you drink an adequate amount of water.
You might be wondering now what the right amount of water to be drinking daily is? On average you should be drinking atleast 2L of water each day. When you factor in exercise I would double the amount of water your drinking.
Always remember dehydration takes 24h to recover from. Drink water regularly to avoid this!