Clint,
I am sure that the name derives from a tannery in the area, and the Water' part refers to the water source. Using 'Water' in a placename is relatively common in Ireland. There is a place near me in Cork called Five Mile Water.
See this link to a marriage that I am sure you are aware of,
On the 25th ult. in the Church of Derryvoland, WILLIAM NOBLE, Esq. of Cooletrain, to ELIZABETH, second daughter of Mr. Archibald Collum, or Tanhouse Water, near Enniskillen.
or this link for another wedding:
https://books.google.ie/books?id=SuHIDwAAQBAJ&pg=PA369&lpg=PA369&dq=tan…
and this link to a kind of description to where it is (you can search the pdf for Tanhouse)
https://simpsonhistory.com/notes/lancelotjohnston_files/historyofennisk…
Best wishes, Kieran