Water potential is a term used in osmosis and basically means how many water molecules there are compared to solute molecules. If the solution has a high water potential, there are a lot of water molecules and few solute molecules (ie it's dilute); if it has a low water potential there are very few water molecules and many solute molecules (ie it's concentrated). If you have a solution of high water potential and one of low water potential separated by a semipermeable membrane, the water molecules will tend to gravitate from solution with high water potential to that with a low water potential, to even out the concentrations. This is osmosis.
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