Acidic liquids are best for dye releasing henna.
Let's go back to grade elementary school science: Cellulose makes up the walls of plant cells and vegetable fibers. The coveted lawsone dye is locked behind those cellulose walls. Water alone doesn't do a very good job of breaking down cellulose. If it did, we'd couldn't get enough fiber in our diet!
Acids break down cellulose walls just fine. Remember writing secret invisible notes with lemon juice on paper as a kid? Heat up the paper & the message is revealed, right? That's because the lemon juice breaks down the cellulose of paper break to simpler sugars, then the heat caramelizes those simple sugars, darkening them!
So use an acidic liquid to make your henna paste & you'll have a higher lawsone dye content in your henna paste.
A second reason for using an acidic liquid is because acids help keep the hydrogen atoms intact. That sounds like gibberish to anti-chemistry peeps, but it's actually really important in determining how much lawsone dye will be able to permanently bind to keratin (hair & nails) & collagen (skin).
So which acidic liquids can be used? Lemon juice, lime juice, apple juice, cranberry juice, vinegar are all great. You can eve just add powdered citric acid.
Warning: using vinegar or apple cider vinegar does not a good smelling paste make.
Acids from the bad side of town: coffee, tea, wine. They are not acidic enough to increase dye release and their dark colour doesn't mean the henna stain will be darker. They tend to smell bad, plus caffeine absorbs through the skin.
Can henna by dye released with water? Yes it can, but the quality of the henna might be compromised: not as much lawsome dye will release, the dye might not bind as well & might not last as long. If you are going to use water, distilled or rainwater is best (lower pH).