The most common and most likely answer to this crossword clue is the 5 letter word MARSH
I've seen this crossword clue in The Daily Telegraph
M
A
R
S
H
More clues leading to the result MARSH
- Area that’s wet and hot on planet
- Right to stop crush in Slough
- Swampy ground damages hospital
- Watery terrain — hard to find on another planet
- Romeo admitted to crush in the bog
- Slough gangster escapes from line up
- Swamp debtors’ prison half torn down
- Injures top of head in swamp
- Law officer letting criminal go to the fenland
- Swamp damages harbour
Buddy explains!

The straight part
We know that "Watery terrain" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case watery terrain = marsh.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does MARSH mean?
MARSH noun- An area of low, wet land, often with tall grass.