Explain the statement water seeks its own level.

The pressure at the any point inside a liquid is depend on its corresponding depth from its surface.
Consider arrangement of the liquid in the given containers having three different liquid columns.

The pressure at A, B and C are equal and is given by
p = p₀ + ρ
Here,
Atmospheric pressure is ρ₀
Density of the water is ρ
Free-fall acceleration at the point of observation is g
Depth of the water from their water surfaces is h.
If the level of the water are not the same in the liquid column, the pressure would not be same at A, B and C. This would contradict the fact that pressure inside a liquid depends on its depth. In order to maintain equal pressures at the same depth, the level of the water are same in the three different liquid columns. Therefore, water seeks its own level.