Theory:

     Next morning, Taro started for work even earlier than the morning before. He carried with him the largest pitcher he owned, for he intended first of all to go to the waterfall. When he reached it, he found to his great surprise all his neighbours there. They were carrying pitchers, jars, buckets — anything they could find to hold the magic saké. Then one villager knelt and held his mouth under the waterfall to drink. He drank again and again, and then shouted angrily, “Water! Nothing but water!” Others also tried, but there was no saké, only cold water.
Explanation:
 
The next day, Taro woke up earlier than the previous day. Since the saké container became empty by serving it to the villagers, he decided to bring home some more of it from the magic waterfall. He took the largest pitcher he had at home and walked towards the forest.
 
waterfall forest.jpeg
A waterfall in the forest.
 
When he reached the waterfall, he was surprised to see the entire village there. All of his neighbours had come carrying pitchers, jars, buckets, and all kinds of containers.
 
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The villagers gathered at the waterfall with big containers.
 
They had come to collect the sake from the magic waterfall.
 
One of the villagers knelt beside the waterfall and held his mouth under the waterfall. He drank from it, but he couldn't taste sakéInstead, he could taste only water. He was so angry that he shouted out, saying "Water! Nothing but water!".
 
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A man calling out angrily "Water! Nothing but water!"
 
Soon, all the other villagers drank from the waterfall, and everyone tasted the same cold water. No saké came out of the waterfall.
 
Meanings of the difficult words:
  
Sl. No.
 Words
Meanings
1
IntendedPlanned.
2
HoldCarry.
3
Held
Here it means kept his mouth under the waterfall.
Reference:
National Council of Educational Research and Training (2006). Honeysuckle. Taro’s Reward (pp. 29-34). Published at the Publication Division by the Secretary, National Council of Educational Research and Training, Sri Aurobindo Marg, New Delhi.