Conventional water systems (blue arrows) often follow a centralized and linear model, in which water, treatment chemicals, and other resources are transported over long distances, used once, and ultimately discharged as waste. In contrast, decentralized water systems (green arrows) treat water closer to the point of use or waste generation, enabling local water reuse, on-demand chemical generation, and resource recovery.By integrating these functions into modular and adaptable treatment systems, decentralized approaches can reduce infrastructure and transportation demands, improve resource and energy efficiency, and create more circular material flows. Distributed treatment capacity can also enhance system resilience by reducing dependence on centralized infrastructure and allowing treatment to respond to local water quality, resource availability, and changing operational needs.