Basically your body is made up of 60%- 70% or so of Water. You need it mainly so you can stay hydrated. Its not so much the essence of water but the function. You need it so you can sweat, process waste faster, and also it really hits the spot when you're thirsty.
The cells of your body are made up of water. In order for it to function correctly, water that is lost via sweat, going to the bathroom, etc ... needs to be replaced. Water from sweat is used to regulate your body temperature. Water also removes toxins from your body.
You are made up of mostly water. Water is used for many different processes in your body, from removing products that can make you sick through urine, to providing energy, to transporting nutrient through out your body.
Your body is somewhere between 80% and 90% water and you are constantly losing water. You lose it many ways sweat is just one of the many ways. Without water your body could not function properly, water is a must for your body. So water is very important to keep your body regluar.