Excerpt in part from “Water Law: An Overview”, The National Agricultural Law Center, http://nationalaglawcenter.org/overview/water-law/
Water…can come from surface waters, such as rivers, lakes, streams, and ponds, or from groundwater, such as an aquifer. The allocation of this important resource is left up to each state…
Colorado water law is based on the system of prior appropriation.
Miners, who first settled the West, needed water to develop their mining claims. However, they could not use the riparian system because the land needed was not adjacent to a watercourse. The miners used a system already in place to solve disputes over water use, “first in time, first in right.” This was the birth of the prior appropriation doctrine, where the first user had the right to continue using the water to the exclusion of the rights of those who came later.
The prior appropriation system is based on priority. The most senior appropriator has the highest priority and can defeat all other less senior appropriators in times of shortages. Unlike riparianism, there is no requirement that a senior appropriator use less water in times of a shortage. Water users may take in order of their respective priorities, each taking their full appropriative right until the water is gone.
Additional information on water rights:
Colorado Department of Natural Resources, Division of Water Resources
Citizens Guide to Colorado Water Law, 4th Edition (2015)