There are four levels of water restriction which can be applied depending on the severity of the water shortage. Each stage has a set of rules about how people can and can't use water when a water restriction is in place. You can see the four stages of water restriction guidelines here.
Water restrictions occur due to multiple factors including low rainfall, drought, significant demand on water supply, and too much rainfall in a short period of time. This causes waterways to turn very muddy, leading to difficulty in treating the water supply.
Water restrictions are put in place when normal (unrestricted) customer demand may cause issues supplying essential water requirements for all customers. Water restrictions are used to make sure that there is enough water for essential customers' needs under all conditions.