The Collaborative International Dictionary of English v.0.48:

Water sprite \Wa"ter sprite`\
   A sprite, or spirit, imagined as inhabiting the water. --J.
   R. Drake.
   [1913 Webster]

WordNet (r) 3.0 (2006):

water sprite
    n 1: aquatic fern of tropical America often used in aquariums
         [syn: floating fern, water sprite, Ceratopteris
         pteridioides]
    2: a fairy that inhabits water [syn: water sprite, water
       nymph, water spirit]