Water exists in three states - solid, liquid, and gas - and can change between these states when it gains or loses heat. It freezes into ice at 0°C when it loses heat, melts back into liquid water when it gains heat above 0°C. Water boils into steam at 100°C when sufficient heat is added, and condenses back to a liquid when steam cools below 100°C losing heat. The rate of evaporation depends on factors like wind, temperature difference, and surface area.