Movement of ions (or any charge carriers) is what causes current flow(electricity).

In pure/distilled water
there are no ions present and it will act as an insulator.
But, in tap water, sea water, mineral water (basically almost any water we use) there are LOTS of
dissolved salts. These dissolved salts are dissociated into their ions. These ions are free to move in water
and makes it a very good conductor of electricity.
When you run a current through water, dissociation occurs (H2O -> H+ + OH-), but only to a very small
extent. You're right to wonder why water itself conducts electricity; the short answer is that it doesn't.
Distilled water is actually a very poor conductor of electricity because of the insignificant dissociation.
When you deal with water on an everyday basis (tap water, rain water, etc), there are a ton of impurities
in it, such as salts and metal ions. This is why water seems to be a good conductor of electricity, because
you normally don't deal with distilled water in everyday situations.

Read more: http://www.physicsforums.com
Pure water is a very poor conductor of electricity because it does not have any
charged particles that can carry the current through it.

Now, tap water may contain certain ions depending on the source from where this water is
extracted. Ions like sodium, potassium, sulfates, carbonates and chlorides may find their way
into the water by leaching into it or if water passes over rocks containing these ions (or
rather minerals).

These ions carry a charge and thus, lend the capacity to water to conduct electricity. Therefore,
some tap water may conduct electricity. How good a conductor the tap water makes depends
on the ions (amount etc.) it contains which depends on the source from where the water has
been extracted. It also depends on what level of treatment the water undergoes
before distribution.

One thing that should be mentioned here is that tap water is not unsafe to drink if it has a high
electrical conductivity (i.e. High but within WHOdrinking water limits). Some springs are known
for healing powers because of the minerals they contain. In other words, they would have high
electrical conductivity but the ion in them may actually be therapeutic.