Without pain medication, a woman is in tune with her body's needs, and is able to regulate them accordingly. When woman give birth in water, the risk of tearing is reduced, and there is little need for an episiotomy. I found myself quite calm during the pushing, and knew when to slow down to prevent tearing. Often in a 'land' birth, the midwife will hold a heated cloth on the perineum to help prevent tearing. In the water, I was surrounded by warmth, and even though it was my first labor and delivery, I never tore.
Water also helps to reduce the level of fear, as a woman is more relaxed and less stressed.
Fear during labor is definitely counterproductive and can slow labor down. Fear during the delivery can cause a woman to push beyond was she should and lead to some severe tearing. Water is a soothing natural element. Even the sounds of water can be relaxing. If a woman has a low risk pregnancy and is progressing well through a labor without complication, water is a wonderful option for pain control.