This command is used to fill a container with a liquid. In the general sense this can be done with any drink container in concert with any other drink container, but in practice this works only in certain circumstances: any pool, pond, oasis, or other large stable liquid source can be used to fill smaller portable liquid containers such as waterskins and barrels.
This command will work differently depending on the method used to actually fill the container. Templar water distributors, for instance, do not require you to tell them which source to use when filling a waterskin.
You can also use this to refill light sources such as lamps and lanterns. Only flammable liquids are usable, and generally oil works best and provides the longest burn per amount of liquid.