Bali has figured prominently in debates on the question of whether irrigation centralizes state power. New evidence shows that irrigation is actually organized by networks of “water temples” that constitute an institutional system separate from the state. Earlier attempts to identify a discrete system of irrigation management misconceived the problem. For most crops, irrigation simply provides water for the plant's roots. But in a Balinese rice terrace, water is used to construct a complex, pulsed artificial ecosystem. Water temples manipulate the states of the system, at ascending levels in regional hierarchies. The permanence of water temple networks contrasts sharply with the instability of the traditional Balinese states. Since the water temples are real, perhaps it is the Balinese “state” that is chimerical.