How does the lack of precipitation affect plant and animal life?

Here is the answer to your questions:

What is the water cycle? One reference work states: “The water cycle consists of four distinct stages: storage, evaporation, precipitation, and runoff. Water may be stored temporarily in the ground; in oceans, lakes, and rivers; and in ice caps and glaciers. It evaporates from the earth’s surface, condenses in clouds, falls back to the earth as precipitation (rain or snow), and eventually either runs into the seas or reevaporates into the atmosphere. Almost all the water on the earth has passed through the water cycle countless times.”—Microsoft Encarta Reference Library 2005.

There are many places on the earth that have little to almost no rain. The deserts of the world may be some of them. In desert like areas like California it may rain less then in other states in the US, but it does have some precipitation, depending on the location.

Plants, animals and even people can live in places that have little rain, however it make it hard to survive, but they adapt.
In areas like this, plants store more water, with some their root system may run deep. Every living thing must have water to survive. This is the way we were created

Here's something to think about, Whose Handiwork Are Rain, Dew, Frost, and Ice?
The Bible says, this when God is talking to Job, God is the great Rainmaker, and even “the wilderness in which there is no earthling man” enjoys his blessing. Rain, ice, and frost have no human father or originator. Job 38:24-30 please read.

Further research on jw.org will help advance your understanding about this subject.