Water is a great solvent. It’s neutral and doesn’t provide any strong positive or negative effects. It just helps components to mix better and to transport active components.
Citric Acid is one of the AHAs and it is a super useful component! It’s a great antioxidant. It acts as a soft peeling that removes dead cells and kills bacteria. It becomes even more effective if used with other cosmetic acids. Combined formulations are more active, but can irritate sensitive skin if used too often. The component can also whiten the skin and remove dark areas.
It's an exfoliator, meaning it increases UV sensitivity of your skin. That's why it's very important to use sunscreen after it.