The liver needs water, and plenty of it, to burn fat and eliminate toxins. If you are dehydrated, the body goes into water conservation mode by slowing your metabolism and using fat to insulate the cells to prevent further water loss. This makes it harder for the liver to do its job.
Without adequate water intake, you gain weight and toxins build up in your body, usually stored in that excess fat. This contributes to diseases that include: diabetes, allergies, cancer, high blood pressure, kidney disease, heart disease and more.
Most of us think we are hydrated enough if we don't feel thirsty. But our thirst mechanism fades as we age. By the time we feel thirsty, we are already in a state of mild to moderate dehydration. Remember that we lose about 2 liters of water a day (roughly equivalent to 2 quarts) via respiration, digestion, perspiration and elimination. That water needs to be replaced every day to prevent dehydration.
To learn more, take a look at this comprehensive article: Dehydration Slows the Liver's Fat Burning Ability. And drink up!