The Terrain Water Erosion component is a filter performing a realistic water erosion for Unity Terrain.
Terrains which we use to see in real life contain footprints of water erosion and our eyes can detect them automatically. So, we want to see the same footprints in games. But it is impossible for most of the artists to make such terrain manually because water erosion is a long integral process influencing the whole surface simultaneously. The only way to make a terrain with water erosion is to model this process.