Water is clear and transparent for three simple reasons

The first step to understanding the different phases of water is to appreciate the bonds that hold the oxygen and hydrogen atoms in water.

Those bonds can be as wispy as cobwebs or as strong as any structural molecular bond. The image shows H2O with bonding between the hydrogen and oxygen atoms

For liquid water, at any one split second in time, some of its molecules are not connected to any others.

When unconnected, each hydrogen atom is turning its back - so to speak - to neighboring oxygen atoms.  Water molecules with two socially-distancing hydrogen atoms are – for that femtosecond (one-millionth of a nanosecond!) in time – unconnected.

In a way, hydrogen atoms can be seen as a child with two parents. One arm reaches to one "parent" oxygen atom, creating a strong bond (the solid line between the red oxygen atom and the blue hydrogen atom in the image above). 

At the same time, the other arm reaches out to a neighboring oxygen atom, creating a weak hydrogen bond (the dotted line between an oxygen and hydrogen atom). The weaker bond is a longer bond. The net effect is that the "child" hydrogen atom is wedged between two oxygen atoms. All three form either a weak or strong connection at any point in time. 

In liquid water, the hydrogen atoms are constantly transforming from a socially-distancing  type of bond (unconnected hydrogen atoms) to having bonds that connect them to two oxygen atoms. 

The multiple states (connected with weak and strong bonds, or unconnected) interchange at an incredibly fast speed. Each femto second - or one billionth of a nanosecond - the connections take place and then disappear; back and forth.

Basically, three things must take place for things to look clear and transparent:

1. There is no refraction of light: The material is homogenous. When the material is heterogeneous, there is haphazard scattering. 
2. There is no absorption of light: The light photons that hit electrons on their way through are not absorbed; they are reflected back to the viewer and/or find spaces between the molecules to go all the way through and come back undisturbed.
3. The material is made of ultra-fine particles: The material is so fine and the particles are of such a small size, that the light that comes back seems to be a uniform beam (our eyes can’t distinguish 2 light rays separated by less than 0.1mm: they will look as one!)

Any material made up of homogenous nanoscale particles, even if they are closely knit, will seem transparent because the material is made up of such minute particles. The light coming back will seem to come back as one beam, rather than interrupted rays. These are the same reasons that glass is clear and transparent.

Assuming the depth of the water is not too much, the light photons can find spaces between the water molecules to get through to the other side and then back to our eyes. 

Water molecules are continuously interchanging from un-connected to connected states at the femtosecond level! This creates spaces between the water molecules through which light photons can pass. It is those spaces that light can find a path through and back!

Suppose one were a nanoscopic ant walking in between those water molecules. To pass through to the other side of a water droplet would mean that the ant would have to be lucky enough for the water molecule to change to an unconected one as soon as the ant reached that molecule.

This would be the equivalent of a car crossing town and the traffic lights changing to green as soon as the car approached the light. For light photons, this is exactly what happens. 

Light moves at such high speeds and there are many photons in a beam of light. Enough of those light photons are able to cross in a straight line to the other side of the water (and back)  without hitting any atoms.

Furthermore, water molecules are very small (each about 0.0000003 mm). Similar to the chain link fence analogy above, the light will appear to be coming back as one beam, given how small the water molecules are.

Keep in mind that water clarity is a function of homogeneity of the liquid (coffee is not transparent), the size of the individual elements making the liquid, and its depth (very deep bodies of water are not clear).