Water leaves the water company through large pipes.

Water travels through lots of pipes that get smaller by the time they reach your house.

Town water pipes usually run up and down the street.

The water company connects their water pipe with the one that goes into your house.  This underground pipe usually comes through to a basement.

A water meter will be attached to the pipe just inside your house.  People that own their homes will get a bill for the amount of water they use.

The outside meter reader in the picture above is so that the people from the water company can 'read' the meter without actually going into your house.  The water company person 'reads' how many gallons of water the people in your home have used each month.  They use these because a lot of people aren't home during the day to have an inside meter read.  It saves time, too.