The water people are an ancient race of guardians of the water pyramid. Not much is known about them, except they are blueish in color and protect the water millennium gummy. The Space Police defeat them during the quest to find the gummy, and the water people are found unmoving on the floor. It is unknown whether any have survived or escaped.
They are described as powerful creatures who have protected the water millennium gummy for ages. When the party asks Parfait if she thinks that they can hold off the space police, she says that the space police is too powerful and will most likely destroy the race of water people.
It is unknown if there are any water people left. Most likely, they all died in the Space Police attack, in which case the Space Police wiped an entire race into oblivion.