Earth formed from solar nebula about 4.6 billion years ago by process of accretion (NASA artist impression shown at left). Matter aggregated under force of gravity to form in initially molten Earth. It is believed that at this point in time a number of events were occurring that lead to an increase in temperatures on the already molten Earth. Some of these events included radioactive decay of elements uranium/thorium and compression of earths mass under gravity. Temperatures rising past the melting point of iron, 1500 degrees C, led to the iron catastrophe, the event where iron and other heavy elements sank towards the center and developed Earth's iron rich core.
Using radioactive dating of uranium and thorium from Earth and Moon rocks, it's estimated that formation of Earth took form around 4.5 BYA, at which time it had acquired 99% of it's present mass, it's moon, an iron rich core and some water, present from outgassing. From studies of the lunar surface there were a high frequency of early impact events that would have released heat, melting and re-melting crustal regions.
It is also during this time that Earth out-gassing and liquid water and vapor equilibrium processes could have led to the development of an early reducing Earth atmosphere.
From the biological perspective, the following four properties make water essential for life:
1. cohesion: by virtue of hydrogen bonding
2. moderation of temperature: high specific heats
3. Insulation of bodies of water by floating ice
4. universal solvent
