Can we fry food with water instead of oil?

We can not. boiling point of water is lower than oil. Food materials contain water in an occluded form or as water of hydration. We fry food essentially to remove this water. For this, the food needs to be heated beyond the boiling point of water (100 deg Celsius). If we use water as the frying medium, the water from the food cannot be removed as the medium itself gets vapourised. However, oil can be heated to more than 150 deg Celsius without charring the food. Being nonvolatile at this temperature, heat from the oil facilitates frying.