A water tower is a large, elevated water reserve. Towers are usually metal, but are sometimes encased in stone or other material. They are usually¹ the tallest structure in small towns, and are often emblazoned with the town's name in large block letters. Common shaped include a cylinder with a conical "hat" on stilt-like legs, and a larger model that is an ovoid on a central cylindrical pillar (these have a rough similarity to the infamous cloud raised by an atomic bomb).
Water towers are elevated to provide water pressure, usually as a backup to the normal water system. They are often the source for the fire hydrants, or a backup water source should the hydrants freeze² or fail. The limestone Chicago Water Tower on that city's north side was the only structure in that area to survive the Great Chicago Fire in 1871.
1. In Ontario, at least.
2. It gets cold up here eh?