Water moves downward through a coarse sandy soil much faster than through a fine-textured soil such as clay or silt. It is also part of the water and energy cycles through evapotranspiration. Moisture in the soil feeds all organisms (plants, plant roots, and animals). It carries nutrients into the ground that promotes plant growth.
Overwatering (saturation) can deplete oxygen levels in the soil, which can lead to diseases in the root system.
Underwatering (wilting point) can lead to slow growth, reduced production, and the eventual death of crops.
Source: University of Georgia