How might people using water affect the environment?

That would depend on if you are taking about people individually or as a group.
As a group dams and water reservoirs can change local weather patterns quite dramatically. Depending on the size bodies of water can moderate temperatures both in winter and summer. Before mankind carried out these projects animals like beavers did, which created wetlands that promoted diversity of life.However mankind has filled in and paved over a huge number of wetlands and trapped or exterminated many species that promoted wetlands.

Many city's still have rain water from streets wash directly into streams, streets made of oil and tar based asphalt.not to mention oil and chemical leaks on streets from traffic. And that does not even account for the millions of small and large towns that don't do any type of sewage treatment before dumping that into streams.

Individually, the toilet water which is used for waste only generally uses good clean water to flush when other sources could be used, Taps left running, non native grass watering, flower watering car washing are all things where we use good clean drinking water where second use water could be used.
All that individual water use make it necessary to have larger reservoirs to provide it.

All that clean water being polluted goes into the ocean.
Where it collects.
And the ocean is the driving force that keeps life on planet earth livable.