Ionic liquids (ILs) and deep eutectic solvents (DESs) have been suggested as eco-friendly alternatives to organic solvents. A trace amount of water is often unavoidable as impurity, and water is also added on purpose to reduce their problematically high viscosity and lower their high price. Understanding the distinct effects of water on the properties of ILs/DESs is highly important. In this review, we collect published experimental and theoretical results for IL/DES-H2O systems at varied water concentrations and analyze them. Results from mechanistic studies, thermodynamic modelling and advanced experiments are collected and critically discussed. Six commonly studied IL/DES-H2O systems were selected to map experimental observations onto microscopic results obtained in mechanistic studies. A great variety of distinct contours of the excess properties can be observed over the entire compositional range, indicating that the properties of IL/DES-H2O systems are highly unpredictable. Mechanistic studies clearly demonstrate that the added H2O rapidly changes the heterogeneous 3D structures of pure ILs/DESs, leading to very different properties and behaviour. There are similarities between aqueous electrolytes and IL/DES solutions but the bulky and asymmetric organic cations in ILs/DESs do not conform to the standard salt dissolution and hydration concepts. Thermodynamic modelling previously assumes ILs/DESs to be either a neutral ion-pair or completely dissociated ions, neglecting specific ion hydration effects. A new conceptual framework is suggested for thermodynamic modelling of IL/DES-H2O binary systems to enable new technologies for their practical applications.