WordNet sense 1 (overly diluted; thin and insipid):

weak

WordNet sense 2 (mixed with water):

cut

WordNet sense 3 (reduced in strength or concentration or quality or purity):

diluted

WordNet sense 4 (corrupt, debase, or make impure by adding a foreign or inferior substance; often by replacing valuable ingredients with inferior ones):

adulterate, debase, stretch, adulterate

WordNet sense 5 (lessen the strength or flavor of a solution or mixture):

reduce, thin, thin out