Water is called "universal solvent" because it is capable of dissolving various types of substances than any other solvent. The water's chemical composition such as its atoms that have a balance electrical charge and arrangement of polar makes it capable of dissociating different ionic compounds and balanced attraction to sodium and other elements, suitable to nature of any substances or life forms. However, this could be a problem in everyday life because given the title "universal solvent", it does not necessarily dissolve every compound. For example: water alone cannot be used in cleaning oils because it can't dissolve waxes and fats, and in dissolving large amounts of salt or sugar in our body.
