1) " of the first water " refers to a grading system for gems/diamonds for their color or luster ,it reflects the greatest purity and perfection of their complexion, which ought to be that of the clearest drop of water. 2) the most extreme kind or top of the league -- he is a fool of the first water. 3) the highest grade or best quality/finest quality of something/someone -- He is an artist of the first water.

This must be a British phrase or something; I've never heard of it in America.

Thank you for "explain to me"))

the highest grade or best quality/finest quality of something/someone -- He is an artist of the first water.

Tip: use "explain to me", because "explain me" means you want an explanation of yourself, not of the topic! ;)