In India millions of women are walking miles to fetch few gallons of water everyday. I don't get why people in California are screaming water shortage. Should be possible for Americans to live on a gallon of water if hundred of millions live like that in India.
Possible? Sure, and a lot oft of hippie/environmentalist types in America do live that way, both in cities and in rural areas.
Is it desirable? Not necessarily. The goal is to be more efficient with water sourcing, distribution, and usage so people have more water to use, not less.
It’s very hard to change your standard of living, and the standard of living in California is very different. We live off of tens of gallons of water a day or more. When you have to cut back, it’s difficult for your human animal to accept it. Population wide, it’s nearly impossible.