Water enters the body in drink and food and leaves in sweat, in breath and in urine. The water content of the blood must stay steady, because if the fluid around cells becomes too dilute or too concentrated, cells gain or lose water by osmosis and stop working properly. Keeping this steady is called water balance.
The kidneys filter the blood and remove urea, a waste substance made when the body breaks down excess amino acids. They also control water balance. Of the ways we lose water, the kidneys can only adjust the amount lost in urine, so they vary both the volume and the concentration of the urine they make.
If the body has too much water, the kidneys make a large volume of dilute, pale urine, so extra water is lost. If the body is short of water, for example after a day with very little to drink, they make a small volume of concentrated, dark urine, so water is saved.