Actually people (and animals) are limited as far as having water all the time. Every time you get in your car and drive somewhere on a hot day without taking a drink with you, you are limiting your liquid intake. As far as helping control housetraining, there's good and bad in it (within reason!). I've personally never limited my dogs intake of water, even during housetraining. I even give them fresh water when putting them in their kennels. That said, limiting a dog's water intake for an hour or two isn't a big deal. And I can almost see doing it overnight as well, to prevent overnight accidents. But you want to limit (ha) how much you limit a dog's fresh water intake to a bare minimum, IMHO. If you definitely notice that the water goes in one end and out the other, it can be a sign of health problems like diabetes.
OK, then how often should I take her out from the water. I mean if it is out all the time how do I know when she needs to go? To be understood, I am giving her as much as she wants at the 3 meal times and from 5 p.m. til 7 p.m. Then I cut off the water til morning.
that sounds reasonable. you can also moisten her food with it so she gets more water. i've used rationing water while housetraining, and i don't have it out during the night. as above you have to be reasonable about it. i ration the times they get it while housetraining, but when it's out they get as much as they want. in warm weather obviously you'd need to give it more often. i've also given them ice cubes in between times. i've read that puppies need about 1 cup for every 8 pounds of body weight per day, on average.
i leave the water out 24-7. mine don't seem to drink alot at all. when they were pups the water was limited and then picked up by 8pm. they need the water, but like us, they can go a little while without.