Climate has long been related to geographical differences in the distribution and diversity of life. What has eluded explanation is why this should be so. One emerging possibility is biological relativity to water–energy dynamics: the relative nature of biotic dynamics to changes in energy/matter conditions caused by changes in water (all states) while doing work, especially liquid water. The dynamic parameters involved – liquid water and optimal energy conditions – are independent of life, and have been shown to provide a simple, globally predictive explanation for co-variation between climate and the species richness of woody plants. Here I elaborate on what I mean by ‘biological relativity to water–energy dynamics’ and how it should relate to the geography and evolution of life in general (terrestrial, subterranean, marine/aquatic biota). Working through a natural hierarchy of physical, geographical, ecological and biological first principles, I outline the hierarchical, abiotic → biotic conceptual framework within which this idea operates. The implications of this idea include the following. First, the biosphere is better conceptualized as a ‘subsphere’ of the liquid hydrosphere – a system within a system, wherein ‘life’ has all the unique physical properties of liquid water, plus unique emergent properties of its own. Second, the fundamental capacity for life to exist and be dynamic in all biotic systems is determined by the abiotic capacity for liquid water to exist and be dynamic, which is always relative to the capacity for water–energy dynamics in general. Third, liquid water–energy dynamics acts as a fundamental mechanism of evolution, while being a constant mechanism of natural selection. Fourth, over space and time, there should be first-order predictable and/or systematic differences in the capacity for, operation and outcomes of, biotic dynamics globally (e.g. species richness), that necessarily dissolve into apparent chaos locally. Fifth, biological relativity to water–energy dynamics provides a fundamental and natural framework for operationalizing hierarchy theory and developing trans-scalar explanations for the geography and evolution of life's diversity.