Tank-style water heaters fill the water heater tank from the main as cold water. Then an element at the bottom of the tank heats the water using electricity or gas. A thermostat controls when the elements are turned on. You can control the temperature of the water using settings for the thermostat.
If you turn off the water main for an extended period, you should turn your water heater off. If the water will only be shut down for a short time, there is no need to turn off your water heater.
If a water heater runs dry, the bottom element will blow. Most of these heating elements are not designed to run on air.
The most common issue with water heaters is water leaks. Eventually all water heaters will leak as the tank corrodes and rusts.