Liquids and semi-solid substances (such as water, acid, lava, mud, etc.) flow, pool, and otherwise dynamically interacts with the world.
Alternate names: Liquid dynamics
Name variations: Water dynamics, Water physics
The first video game about Liquid physics was released in 1991.
Earliest form of this was witnessed in old side-scrollers where each pixel was like a grain of sand, and with water, a droplet of water, however huge.