The word can be found in the court documents from Sandomierz Voivodship in Poland dating to 1405 and 1537. At these times the word referred to medicines and cosmetics.  A number of Russian pharmaceutical lists contain the terms "vodka of bread wine" (водка хлебного вина) and "vodka in half of bread wine" (водка полу хлебного вина).  As alcohol had long been used as a basis for medicines, this implies that the term vodka could be a noun derived from the verb vodit’, razvodit’ (водить, разводить), "to dilute with water".
"vodka" with "water" is the name of the medieval alcoholic beverage aqua vitae (Latin, literally, "water of life"), which is reflected in Polish "okowita", Ukrainian оковита, or Belarusian акавіта.
it's delivered from slavic voda/woda, close enough.