The roots of this tradition are estabished in playing and sharing a nice moment together with family and friends during the carnival feasts.
However this tradition has changed through time and unfortunelly in many places it has become a very primitive and aggresive activity. Why? Many people have the habit of using water balloons on purpose only filled with little water so that they don't break easily or put them in a freezer for the same reason. Only that the side effect is quite sad, they are harder and actually hurt people when they receive the water balloon hit from a distance.
Women are the favorite target of this activity, and many really hate it and fear going out to the streets during this period of time before and during carnival. The municipality has established that people should not get other people they don't know wet, "If someone is not playing with you, then do not get them wet.", says the municipality decree.
But, as most laws in Bolivia, these are not obeyed in general and so many accidents happen.
So a very innocent and family activity has become an activity of accepted social aggresiveness, specially towards women. This activity is very similar in all of Bolivia, except every city has its special characteristic. In Santa Cruz it happens only during the carnival days, but they throw very nasty liquids at people. In La Paz baloons fall from the tall buildings and are sometimes frozen on the way down so they hit like a rock.
Not all is negative for this old tradition, but it has to be controlled and respect has to be re-established as the basis for playing in this manner.