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Ich habe Wasser = I have water
Du hast Wasser = You have water (informal, addressing one person)
Er/Sie/Es hat Wasser = He/She/It has water
Wir haben Wasser = We have water
Ihr habt Wasser = You have water (informal, addressing more than one person)
Sie haben Wasser = They have water / You have water (formal, addressing one or more people)
You can think of "Ihr habt Wasser" as "You guys have water" or "Y'all have water", but since these pronouns are not considered Standard English, the translation will always say "You have water".
Try playing the audio slower. Eventually you will be able to hear the difference (think "er" sounds like "air" and "ihr" sounds like "ear")
The explanation for Ihr reads ' Ihr = you or her. Ihr can mean plural you: "Ihr seid Schüler = You are students" or her: "Er spricht mit ihr = He is talking to her" '.
How do I tell when Ihr means "you" or when it means "her"?
Think of the grammatical cases. "ihr" = "you all" is a nominative form, so it is used as a subject of a sentence. "ihr" = "her" is the dative and genitive form of "sie" (3rd person singular", so its an object form. And to make it a bit more confusing "ihr" can also mean "their" :-)
What does exactly "You people have water" mean? Does it mean possession like it's their water or "you are drinking water in this moment"???