The statistic tracks the level of the player character's dehydration, steadily accumulating over time (twice as fast as starvation and five times as fast as sleep deprivation). Like with other statistics, reaching a level of 1000 results in instant death. Without water, this counter is reached in three days of in-game time.
Most drinks sate thirst, with alcoholic beverages and sodas being the exception, as they increase it. Certain foods can also reduce thirst or increase it. Water can be drunk from water sources directly, reducing thirst by 200 points per tick (230 with Camel of the Mojave). This kind of sustenance does not scale with Survival. What Survival does is scale the effectiveness of food and drink. At high levels, items can sate thirst - or increase it - by great amounts. As such, care should be taken.
Vault 13 canteen is a good way to greatly reduce the amount of water items the player has to carry, as it automatically reduces dehydration via script.