Water is a common pool resource, indispensable for human life and development. Consequently, the need for organizing its use in an efficient,effective, and sustainable manner is now recognized as paramount for ensuring sustainable development. Towards this end, a paradigmatic shift has been globally adopted with emphasis on designing co-management regimes rooted in community participation, India being no exception. It can be contended that despite this approach the newly designed water management regimes are alien, top-down, and universalistic with little or no concern and connections with the localized traditional WRM (water resources management) structures. Perhaps these assume that local communities either lack any operational resource management system or that the ones in practice are irrational, narrowly pragmatic, or in the process of disappearance. This paper examines the reality behind such assumptions through a holistic study of water management traditions in rural India. It demonstrates that rooted in the cosmology of society, the traditional regime enables collective action for management of water as a CPR (common property resource). The system continues to be enduring and vibrant, full of meaning and relevance for the practitioners. Finally, it urges the need to understand and makes suggestions for applying the knowledge to designing new 'co-management' based water management strategies proposed within the contemporary water policy context by building these upon existing localized traditional templates.