Megami would be correct. It has nothing to do with water. It is original from his dream. This has nothing to do with Mizugami. This is not a Water Goddess.
Every martial arts has a vision or symbol.
This God or Goddess was at first not clear to Shimabuku. It came riding on a dragon. The Goddess talked to Shimabuku saying he had enough karate knowledge to teach publicly. This was his own God which told him. Shimabuku was a Sanjinso, fortune teller, so he had more religous beliefs than most.