[riverrat1952]

My understanding is the water injection cools air and helps lower the possibility of detonation. (Already said) This allows you to do other things that cause detonation like increase boost with higher compression ratios, higher pressure from you turbo/supercharger and/or advancing your timing. The cooling effect also allows more air (oxygen) to be brought into the cylinder because cold air is dense. The price paid by the water molecules taking up air and fuel space is out weighted by this cooling effect, when optimized.