I have never heard of or read anything that states "drinks" should be limited, especially not water as it has no calories. However, for toddlers (say age 1-3), the nutrition books I have used all say that milk should be limited to 16-24 ounces per day, and juice to 4-6 ounces per day. Anything more than that and too many calories are going to be from the wrong sources for them to be hungry enough to eat the right foods.
I limit milk to 16 ounces per day but then yogurt and cheese is on top of that for DS (which I limit to about 1-2 oz of cheese and 4-5 tablespoonfuls of yogurt) and juice to about 2-3 ounces undiluted (but then dilute that into however much water it happens to be).
I never limit amounts of water - no calories in it so no need to. If he's thirsty he gets water to drink and I let him dictate how much he needs.