Water resource is an important catalyst necessary for accelerating both economic and social development. Thus, water scarcity is the most important environmental constraint to development, particularly in areas that face limited water in terms of quantity and quality. Water availability is closely linked to human welfare and health by affecting nutrition status and quantity of drinking water. It also has impacts on household labour because of the time and energy spent in obtaining it. These problems are more keenly felt in an agricultural subsistence economy. In many areas, the demand for water has been increasing due to rapid population growth, economic development, and climatic change. Under such circumstances, water quality is given less importance due to limited access. Consequently, local communities have evolved strategies for coping with water stress and drought. These strategies include use of various sources of water, inaction to strict bye-laws regarding the use of water, changes in transport technology, crop diversification, wage labour, and possibly seasonal migration. Some of these actions have measurable long-term demographic consequences, particularly if water stress is severe or repetitive. The available strategies are likely to vary from one area to another, so that demographic effects are modified by local ecological, economic and social structures. Although most governments and donor organizations often put much emphasis on the provision of water for drinking purposes, there is clear evidence that the supply of water for other uses has equal importance especially among rural communities. Using examples from 12 villages in Mwanza Region, this paper demonstrates the changing nature of water demand and uses among the rural population. It is also argues that water for other uses is given high priority by the communities concerned. This observation suggests that putting too much emphasis on drinking water needs, addresses a rather insignificant part of the problem of water resources and biases the range of solutions which are likely to be proposed for perceived shortages. The dominance of other water uses necessitates the provision of multipurpose water that can serve a number of contrasting functions. This demandresponsive approach can enable the local communities to choose the type of service required basing on the perceived needs and their ability to manage the water scheme.