My mom used to render lard and squeeze the last little bit out of what was left and that's what cracklins were. (There was a Czech word for it that we knew it by that might have been something like schvartke.)
I don't recall any water. The whole point is to drive the water off so I can't see where adding any makes any sense.
I would keep cooking it until you drive most of the water off. I would use a low heat for a long time as high heat could burn it.