I thought this was a good explanation from
http://furbo.org/2015/07/14/a-watch-water-and-workouts/
Don’t Touch Me There
Like other iOS devices, the Apple Watch uses a
capacitive touchscreen. Using our bodies as a conductor, the screen senses changes in capacitance using an electrostatic field that surrounds the display. When you surround your body and screen with a conductive liquid, that dynamic is shot to hell.
Unless you’re swimming in distilled water, the touchscreen on your Apple Watch just won’t work.
You can see this effect for yourself quite easily: just put your watch in a glass of water and try to enter the passcode:
Try using the touchscreen like this and you’ll start to understand a fundamental problem with Apple Watch.
Interestingly, the San Francisco Bay Area has some of the
cleanest municipal water in the United States. The water in Silicon Valley literally comes from a pure mountain stream that is free from sediments. Most of us aren’t so lucky: if you’re trying this test in Cupertino, try dissolving a little salt in the water first.
The touchscreen isn’t the only thing that stops working: the watch’s Force Touch feature is blocked by software.
Any pressure on the screen’s sensors is ignored unless there’s corresponding touch registered on the display. You can test this for yourself by placing an insulator between your finger and the watch’s screen (I used a wooden spatula.) No matter how hard you press, nothing happens until you remove the capacitance barrier.
We’ll explore the usability implications of these shortcomings after learning a little more about water.
Watch.