The Water Totem is required for a shaman to use water-aligned totems. If no Water Totem is in your inventory, you cannot use water-aligned totems. All relic slot totems count as Water Totems, and if one is equipped or in the shaman's inventory, the Water Totem item is not needed. The Water Totem can never be destroyed, however, but if the character has a relic totem then the Water Totem can be placed in the character's bank instead of taking up inventory space.