Water is virtually incompressible in any situation familiar to us. That is, if we can ta flexible container full of water and no air, then we cannot make the container smaller by squeezing it. To assume water is incompressible is a usually a good and convenient approximation when doing calculations. It means that pressure is transmitted instantly in hydraulic systems, and the speed of sound in water is infinite (in fact the speed of sound in water is about 1500 m/s.
The reason water, and many liquids, are so incompressible is that the atoms or molecues are about the same distance apart as if the water were frozen to make ice. When you try to compress water the molecules are forced into proximity and repel each other strongly. Uniquely, when water freezes the distance between molecules increases slightly. The molecules in a gas are about times further apart.
In fact water usually contains dissolved gases. When we compress water, we are usually compressing the dissolved gas in the water.
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