to water (to give an animal water to drink)

to give an animal water to drink
Example: The horses had been fed and watered.
Source: Cambridge Advanced Learner's Dictionary 4th Edition

Neither I nor my Australian teacher have ever heard such a usage, but the CALD has another opinion. Who is right?

Water as in "to give water to drink" and standing on its own without feed is now rare, I would say.

OED gives such a use only from 1940, and from a literary source from an older age. John Buchan actually died in 1940, aged 64.

1940 J. Buchan Memory Hold-the-Door v. 125 We watered our horses and went supperless to bed.

Even there, water is used for livestock rather than domestic animals. More recent citations occur with feed ("fed and watered") which is something of a set phrase. There's even a recent Australian citation:

1994 Herald (Glasgow) (Nexis) 11 June 11 A kindly high-complexioned old chap well fed and watered on beef and claret.
2013 North West Star (Austral.) (Nexis) 4 Apr. 3 A poor wet season has left graziers¹ unable to feed and water their cattle on their own properties.

Watered could be used of more domestic animals ("I didn't leave the farm before I'd watered the dogs") but its primary association with livestock does imply that the animal is not a house-pet².

Note that using fed and watered in respect of people (especially described as "a high-complexioned old chap") might be considered a little flippant, although OED does have citations using the expression for armies, where it would be entirely neutral.

¹ grazier is unusual, but has considerable similarity of construction to glazier.

² I could only find one actual example of ODO's watering cats sentence which Lawrence mentioned (that is, not a quote but the source text), and that was in an online novel which does not seem to me to be particularly well-written: The Sager's Creek Chronicles: Keboe's Quandary by The Universal Storyteller.

It's a good dictionary. If they have such a term or definition, it must be based on actual usage in some region or time. So, it must be okay to use it as defined.

But since it's not a commonly heard usage in our daily lives, maybe some people will find it odd, just like you did.

I'd probably avoid saying, "let's go water the cats, dogs etc."